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Issues:
1. Imposition of penalty under Section 28(1)(c) of the Income-tax Act for revising a return after dishonesty is discovered. Analysis: The judgment involves a reference under Section 66(1) of the Income-tax Act regarding the imposition of a penalty under Section 28(1)(c) when an assessee seeks to revise a return after dishonesty is detected by the Income-tax Officer. The case pertains to an assessee dealing in land transactions who initially submitted an incorrect return, disclosing profits at a flat rate of 5 per cent instead of the actual profit. The Income-tax Officer discovered the discrepancy and called for proof of the cost price of the land sold. Subsequently, the assessee sought permission to revise the return, claiming the initial return was prepared hastily and under the impression that the profits were not taxable. The Appellate Tribunal found that the incorrect return was intentional, leading to the question of the applicability of Section 28(1)(c) for concealing income particulars or furnishing inaccurate details. The key issue revolves around the interpretation of Section 28(1)(c) of the Income-tax Act, which allows for a penalty if an assessee conceals income particulars or provides inaccurate details. The Income-tax Officer and the Appellate Assistant Commissioner both found that the assessee deliberately concealed income, leading to a penalty under the said provision. The matter was further deliberated at the Appellate Tribunal, where a difference of opinion arose regarding the timing of filing a revised return and its impact on the penalty imposition. The Judicial Member ultimately held that the penalty under Section 28(1)(c) was applicable as the assessee had deliberately furnished false income particulars, despite seeking permission to revise the return post the discovery of dishonesty. Furthermore, the judgment delves into the procedural aspects of filing revised returns under Section 22(3) of the Income-tax Act. It highlights the requirements for a valid return, emphasizing that a statement seeking permission to revise a return cannot be considered a revised return unless it complies with the prescribed form and verification criteria. The judgment cites precedents to support the notion that mere correspondence seeking to rectify errors in the original return does not constitute a revised return under the law. Consequently, the High Court concluded that in cases where an assessee attempts to revise a return after dishonesty is detected, a penalty under Section 28(1)(c) can be imposed, disregarding the hypothetical scenarios and focusing on the actual facts of the case. In conclusion, the High Court answered the reference by affirming that the penalty under Section 28(1)(c) can be imposed when an assessee seeks to revise a return post the discovery of dishonesty by the Income-tax Officer. The judgment clarifies the distinction between seeking permission to revise a return and actually filing a valid revised return, emphasizing the legal requirements for the latter. The decision underscores the importance of transparency and accuracy in income disclosures under the Income-tax Act, ensuring compliance with statutory provisions to avoid penalties for concealment or furnishing inaccurate particulars of income.
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