2012 (5) TMI 122 - HC - Income Tax

Penalty under Section 271 (1)(c) - revised return surrendering the amount due to mistake committed by the Accountant, was a case of concealment of particular of income and to be added to its income as extra profit Held that - No illegality in the order of the Tribunal - concealment of income and furnishing inaccurate particulars of income was surfaced by the AO only then Rs.1,00,000/- was surrendered, after availing multiple opportunities of filing revised returns - Suffice it to say that the Tribunal has found that the concealment has been detected by the Assessing Officer and the same forced the assessee to file the revised return against assessee.

Summary

Issues:
1. Interpretation of Section 271(1)(c) of the Income Tax Act, 1961 regarding concealment of income.
2. Bonafide intention in filing revised returns and surrendering amounts.
3. Burden of proof on the department to establish concealment.
4. Legality of penalty imposition under Section 271(1)(c).
5. Determining whether filing a revised return due to accountant's mistake constitutes fraud or concealment under Section 271(1)(c).

Issue 1: Interpretation of Section 271(1)(c) - Concealment of Income
The Tribunal analyzed whether the revised return filed by the assessee, surrendering an amount due to a mistake by the Accountant, constituted concealment of income under Section 271(1)(c). The Tribunal found the explanation of the assessee regarding the discrepancy in purchase figures unconvincing, leading to the conclusion of concealment.

Issue 2: Bonafide Intention in Filing Revised Returns
The Tribunal deliberated on whether the surrender of an amount by the assessee and filing revised returns were done in good faith to avoid litigation. The Tribunal determined that the surrender of the amount was not bonafide and was not solely to purchase peace, indicating a lack of genuine intention in rectifying the error.

Issue 3: Burden of Proof on the Department
The question arose whether the department had discharged its burden of proving concealment of income by the assessee. The Tribunal scrutinized the evidence presented by both parties and concluded that the department had successfully established the concealment and filing of incorrect particulars by the assessee.

Issue 4: Legality of Penalty Imposition
The Tribunal assessed the legality and propriety of imposing a penalty under Section 271(1)(c) after rejecting the explanation provided by the assessee for the discrepancy in purchase figures. The Tribunal found that the penalty was justified based on the concealment of income and the furnishing of incorrect particulars by the assessee.

Issue 5: Accountant's Mistake and Fraudulent Intent
The Tribunal examined whether the filing of a revised return due to the Accountant's mistake, resulting in additional income, could be categorized as fraud or willful concealment under Section 271(1)(c). The Tribunal concluded that the surrender of the amount was not bonafide, indicating a lack of genuine intention in rectifying the error caused by the Accountant.

In summary, the High Court analyzed various aspects related to the assessment year 1993-94 under the Income Tax Act. The Tribunal's decision focused on the concealment of income, the bonafide intention behind filing revised returns, the burden of proof on the department, the legality of penalty imposition, and the interpretation of fraudulent intent in cases of revised returns due to Accountant's mistakes. The Tribunal's findings upheld the penalty imposition, emphasizing the importance of genuine explanations and accurate disclosure of income to avoid penalties under Section 271(1)(c) of the Act.