2012 (12) TMI 981 - HC - Income Tax

Penalty u/s 271(1) (c) - Income revised in revised return filed after survey - Held that - We are however of the opinion that in the impugned judgment of CIT v. Manu Engg. Works 1978 (9) TMI 18 - GUJARAT High Court , the Tribunal has committed no legal error. It was not a case where the assessee had discovered some inadvertent omission or an unintended wrong statement which had crept up in the return filed. It was found that the assessee was even at the time of filing of return aware of the falsity of the statement and incorrectness of particulars of income. We are of the opinion that the Tribunal committed no error in confirming the penalty imposed by the Assessing Officer and confirmed by the CIT(appeals). Even if the assessee had made any further declarations in the revised return, we cannot lose sight of the fact that such return was filed only after the survey was carried out by the Revenue and further that such revised return was rejected as non-est. It is not necessary for us to go into this aspect any further since we find that the Assessing Officer had come to a definite finding that the penalty was required to be imposed since the assessee had concealed the particulars of income. We therefore, need not disturb the Tribunal's ultimate conclusion merely for the fact that the Tribunal rejected the assessee's contention may be on some erroneous premise when we find that such contention even other-wise was not required to be accepted in law. - Decided against the assessee.

Summary

Issues:
Penalty under section 271(1)(c) of the Income-tax Act, 1961 for concealing particulars of income.

Analysis:
The appellant filed a return of income for assessment year 2001-2002, declaring total income of Rs. 9,86,384. A survey was conducted, and a revised return was filed declaring total income of Rs. 90,69,750. However, the Assessing Officer imposed a penalty for concealing income, citing bogus creditors and expenses as evidence of concealment. The appellant argued that the revised return disclosed all material facts, relying on the decision in Reliance Petroproducts Pvt. Ltd. case. The Assessing Officer rejected the appellant's contentions, concluding that the revised return was non-est and imposed a penalty of Rs. 43,16,890. The Commissioner(Appeals) upheld the penalty, stating that the revised return did not fulfill the requirements of section 139(5) of the Act. The Tribunal also rejected the appeal, emphasizing that the revised return was held to be non-est until after the survey.

The appellant contended that full disclosures were made in the revised return, and the penalty was unjustified. The Tribunal found that the appellant was aware of the falsity of statements and incorrect particulars of income even when filing the original return. The Tribunal upheld the penalty, noting the substantial turnover of the company and the acceptance of bogus entries during the survey. The Tribunal also clarified that the Assessing Officer clearly imposed the penalty for concealing particulars of income.

The Tribunal's decision was in line with legal principles, as the appellant's revised return was rejected as non-est due to the concealment of income. The Assessing Officer's clear finding of concealment justified the penalty, and the Tribunal correctly upheld it. The Tribunal's rejection of the appellant's contentions was not erroneous, as the penalty was based on concealment of income, and the introduction of section 271(1)(1B) was not relevant in this case. The Tribunal's decision to dismiss the appeal and uphold the penalty was justified, considering the appellant's concealment of income and the Assessing Officer's clear findings.

In conclusion, the Tribunal's decision to uphold the penalty for concealing particulars of income was legally sound. The appellant's arguments were refuted based on the clear findings of concealment by the Assessing Officer. The Tribunal's decision was in line with legal principles and did not warrant interference, leading to the dismissal of the Tax Appeal.