2012 (11) TMI 901 - AT - Income Tax

Return of Income u/s 153 Whether ROI filed in response to notice u/s 148 is a voluntary return if it filed before the expiry of the time limit u/s 153 Held that - Even if the return has been filed within the time prescribed u/s 153 is not a voluntary return. Explanation to Sec.148 makes it clear that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. Therefore, the assessee cannot say that the return filed was voluntary return as it was filed before the expiry of the time limit as specified in section 153. In favour of revenue Penalty u/s 271(1)(c) - Difference in income as TDS statement and ROI u/s 153 Concealment of income Assessee filed return u/s 153 in response to notice u/s 148 AO made addition on said amount & levy penalty u/s 271(1)(c) Assessee contended that it was not deliberate concealment and it was on account of oversight Held that - The plea of the assessee that error was on account of oversight is not tenable. The assessee had filed return of income in pursuance to notice issued u/s 148 and claimed benefit of TDS on the commission earned. The assessee has shown in his ROI, the exact amount of TDS whereas he has shown Rs. 5,00,000/- less in the commission earned. This cannot be said to be an inadvertent or a bonafide mistake. It is clearly a deliberate attempt on the part of the assessee to conceal the income. Issue decides in favour of revenue Since the assessee had filed return for the first time, it would be too harsh to impose penalty on the entire amount of tax. We, therefore, reduce the penalty only to be levied on the income escaped i.e. Rs.5,00,000/- the amount not shown in the return of income. Ground of assessee partly allowed

Summary

Issues:
1. Assessment of income and imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961.

Detailed Analysis:
1. The appeal was filed by the assessee challenging the order of the CIT(A)-I, Coimbatore concerning the assessment year 2007-08. The case revolved around the commission received by the assessee, which was subject to tax deduction by another party. The Assessing Officer made an addition to the income returned by the assessee, leading to penalty proceedings under section 271(1)(c) for alleged concealment of income. The penalty was imposed based on the assessee's failure to file a return voluntarily and the alleged concealment of Rs.5,00,000.

2. The CIT(A) upheld the penalty, stating that the assessee had not filed a return voluntarily and had concealed income. The assessee then appealed to the Tribunal, arguing that the return was filed in compliance with a notice under section 148 and that the omission of Rs.5,00,000 was due to oversight, not deliberate concealment. The Revenue contended that the assessee deliberately avoided filing the return to evade tax liability, showing mens rea in the act.

3. The Tribunal analyzed the facts and circumstances, concluding that the return filed by the assessee was not voluntary, as it was prompted by the assessment proceedings of another party. The Tribunal noted that even though the return was filed within the prescribed time limit, it did not qualify as a voluntary return under the Explanation to Section 148. Regarding the Rs.5,00,000 discrepancy in income, the Tribunal found it to be a deliberate attempt at concealing income, rejecting the assessee's claim of oversight.

4. The Tribunal partially allowed the appeal, reducing the penalty amount to be levied only on the concealed income of Rs.5,00,000. The Tribunal directed the Assessing Officer to rework the penalty accordingly. The decision maintained the penalty but adjusted the amount subject to penalty, considering the circumstances of the case and the tax deducted at the source.

In conclusion, the Tribunal's judgment addressed the issues of voluntary filing of returns, deliberate concealment of income, and the appropriate penalty amount, providing a detailed analysis and decision based on the facts and legal provisions under the Income Tax Act, 1961.