2002 (10) TMI 34 - HC - Income Tax

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right to hold that Amnesty Scheme did not apply to the assessment proceedings pending under section 147 having been initiated by the service of notice under section 148 served on the assessee on February 27, 1986, for the assessment year 1983-84, but not in penalty proceedings and, therefore, various circulars containing Amnesty Scheme were not applicable to the assessee s case? - 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the applicability of the Amnesty Scheme could be judged in the assessment proceedings including the appellate proceedings but not in penalty proceedings? - it would be appropriate to set aside the order of the Income-tax Appellate Tribunal and remand the case for passing a fresh order after addressing on the question referred to above.

Summary

Issues:
1. Applicability of 'Amnesty Scheme' to assessment and penalty proceedings.
2. Interpretation of the 'Amnesty Scheme' in the context of assessment and penalty proceedings.

Analysis:
1. The first issue revolves around the applicability of the 'Amnesty Scheme' to assessment and penalty proceedings. The case involved an assessee who filed a return under the Amnesty Scheme after receiving a notice under section 148 for the assessment year 1983-84. The Assessing Officer initiated penalty proceedings under sections 271(1)(a) and 273(2)(b) of the Income-tax Act. The assessee contended that no penalty was leviable under section 271(1)(a) as per the Amnesty Scheme. The Tribunal confirmed the penalty under section 271(1)(a) but canceled the penalty under section 273(2)(b). The court emphasized that the Amnesty Scheme aimed to encourage tax evaders to disclose past evasions without fear of prosecution or penalties. The court referred to relevant factors such as full disclosure, payment of tax, and cooperation in the assessment process as crucial under the scheme.

2. The second issue pertains to the interpretation of the 'Amnesty Scheme' concerning assessment and penalty proceedings. The Tribunal raised the question of whether the Amnesty Scheme could be considered only in assessment proceedings and not in penalty proceedings. The assessee argued that returns were filed under the Amnesty Scheme, while the Revenue contended that the assessing authority's decision on the scheme's applicability in assessment proceedings cannot be revisited in penalty proceedings. The court noted contradictory findings on whether the return was filed under the Amnesty Scheme and decided to remand the case for a fresh order. It directed the Income-tax Appellate Tribunal to re-examine the matter, specifically addressing whether the returns were filed under the Amnesty Scheme and related questions.

In conclusion, the court set aside the Tribunal's order and remanded the case for further consideration, emphasizing the need to determine if the returns were filed under the 'Amnesty Scheme.' The judgment highlighted the importance of full disclosure, tax payment, and cooperation in assessment proceedings under the Amnesty Scheme. The decision underscored the significance of addressing the applicability of the scheme in both assessment and penalty proceedings, ensuring a fair and thorough examination of the matter.