2013 (8) TMI 969 - HC - Income Tax

Penalty u/s 271(1)(c) - Held that - CIT (Appeals) and so also the Tribunal both have considered the matter in detail and finally arrived at a correct conclusion that the income declared by the assessee from the long-term capital gain by selling agricultural land disclosed by the assessee in his revised return of income was accepted by the assessing authority and there was no material available on record by which there could be an inference drawn by the authority that it was a deliberate concealment on the part of the assessee and it could not be considered that there was an inaccurate particular of income that was made the basis for inflicting penalty upon the assessee in exercise of powers conferred u/S. 271(1)(c) of the Act.

Summary

Issues:
1. Reassessment and penalty imposed under Section 271(1)(c) of the Income Tax Act.
2. Validity of penalty for deliberate concealment of income.
3. Interpretation of Section 271(1)(c) of the Act.
4. Consideration of substantial question of law in appeal under Section 260A.

Analysis:
1. The case involves an appeal filed by the Revenue under Section 260A of the Income Tax Act regarding the reassessment and penalty imposed on the assessee under Section 271(1)(c) of the Act. The assessee initially filed the original return of income for the assessment year 2004-05, but later a notice for reassessment was issued, leading to the filing of a revised return. Subsequently, a penalty was imposed on the assessee for alleged deliberate concealment of income.

2. The CIT (Appeals) observed that after the reassessment was accepted, there was no evidence of deliberate concealment by the assessee, and the penalty imposed was unjustified. The Tribunal also upheld this view, dismissing the Revenue's appeal against the CIT (Appeals) order. The assessing authority's acceptance of the revised return was a crucial factor in determining the absence of deliberate concealment.

3. The counsel for the appellant contended that the authorities failed to appreciate the scope of Section 271(1)(c) of the Act, arguing that the penalty was wrongly imposed despite the revised return being accepted. However, both the CIT (Appeals) and the Tribunal thoroughly examined the matter and concluded that there was no deliberate concealment or inaccurate declaration of income by the assessee.

4. The High Court, comprising Ajay Rastogi and Narendra Kumar Jain-II, JJ., noted that there was no substantial question of law requiring consideration in the appeal under Section 260A. The Court affirmed the findings of the lower authorities and held that the penalty imposed on the assessee lacked merit. Consequently, the appeal was dismissed, emphasizing the limited scope of review under Section 260A in the absence of a substantial legal issue.

This detailed analysis of the judgment highlights the key issues, the sequence of events, the reasoning of the lower authorities, the arguments presented, and the final decision of the High Court in dismissing the appeal.