2002 (6) TMI 590 - AT - Income Tax

Summary

Issues Involved:
1. Cancellation of penalty u/s 271(1)(c) for furnishing inaccurate particulars of income and concealing real income.
2. Non-acceptance of revised figures of expenses by the Assessing Officer.

Issue 1: Cancellation of Penalty u/s 271(1)(c)

The Revenue appealed against the CIT(A)'s order dated 28-2-1995, which cancelled the penalty of Rs. 50,000 imposed u/s 271(1)(c). The Revenue argued that the assessee furnished inaccurate particulars of income and concealed real income, as the figures of total receipts were changed only after being pointed out by the department with reference to the assessee's bank account.

The assessee, an unregistered firm and labour contractor, originally filed a return showing total receipts of Rs. 19,41,233 and net profit of Rs. 99,960. Upon examination, the Assessing Officer found total receipts to be Rs. 23,82,732. The assessee then revised the return showing income of Rs. 1,17,560. The Assessing Officer did not accept the revised expenses due to lack of evidence and imposed a penalty of Rs. 50,000 u/s 271(1)(c).

The CIT(A) deleted the penalty, citing various High Court decisions that no penalty u/s 271(1)(c) can be levied merely on account of estimated additions. The CIT(A) also noted that the penalty imposed was almost twice the minimum amount without justification.

The Tribunal, however, found that the revised return was non est as it was not filed in accordance with section 139(5). The original return was filed u/s 139(4), and the revised return was invalid. The Tribunal held that the assessee concealed income by understating receipts in the original return and failed to provide evidence for the revised expenses. The Tribunal reversed the CIT(A)'s order and confirmed the penalty imposed by the Assessing Officer.

Issue 2: Non-acceptance of Revised Figures of Expenses

The Assessing Officer did not accept the revised figures of expenses shown by the assessee in the revised return, as there was no evidence to support the enhanced expenses. The Tribunal upheld the Assessing Officer's decision, noting that the assessee failed to produce books of account or any other evidence to substantiate the revised expenses. The Tribunal emphasized that the concealment of income was apparent from the record, and the penalty u/s 271(1)(c) was justified.

Conclusion:

The Tribunal allowed the Revenue's appeal, confirming the penalty of Rs. 50,000 imposed u/s 271(1)(c) for concealment of income and furnishing inaccurate particulars of income. The revised return filed by the assessee was deemed invalid, and the assessee's failure to provide evidence for the revised expenses led to the confirmation of the penalty.