2013 (12) TMI 186 - AT - Income Tax

Penalty u/s 271(1)(c) - The assessee filed his return of income for assessment year 2004-05 on December 12, 2006 showing income of Rs.4,99,140 and for the assessment year 2005-06 filed a return of income on December 31, 2007 showing income of Rs. 10,49,250 The penalty was levied for not filing the return within the time allowed for filing of return - Held that - The returns of income were not valid returns as they were not filed within the time allowed under section 139(4) - In view of Explanation 3 to section 271(1)(c) the entire assessed income constitutes concealed income The assessee failed to explain as to why the penalty u/s 271(1)(c) shall not be levied when the return is not filed within the time allowed under section 139 when the assessee had taxable income - The default is not mitigated by filing the return before the time limit of completion of assessment specified under section 153(1) - Decided against assessee.

Summary

Issues:
- Appeal against penalty under section 271(1)(c) of the Income Tax Act.

Analysis:
1. The appeals were filed by the assessee against orders of the Commissioner of Income-tax (Appeals) upholding penalty under section 271(1)(c) of the Act. The assessee contended that the penalty was unjust as no concealment of income occurred. The Assessing Officer initiated penalty proceedings due to late filing of returns and non-payment of advance tax.

2. The Assessing Officer rejected the assessee's submissions, citing that the returns were filed after the issue of notice under section 142(1) and after the allowed time. He also noted that the assessee had not paid advance tax on taxable income. The penalty was imposed based on Explanation 3 to section 271(1)(c) as a minimum amount.

3. The Commissioner of Income-tax (Appeals) confirmed the penalty, stating that the assessee's actions constituted concealment of income under section 271(1)(c). The Commissioner dismissed the argument of reasonable cause for the delay in filing returns, emphasizing that the penalty was justified even when the assessed income matched the return.

4. During the appeal, the authorized representative reiterated the assessee's arguments, while the Departmental representative supported the lower authorities' orders. The Departmental representative highlighted the continuous default in filing returns and emphasized the need to penalize habitual defaulters to ensure compliance with tax laws.

5. The Tribunal upheld the penalty, noting that the Assessing Officer's initiation of penalty proceedings was valid as per section 271(1B) of the Act. The Tribunal found no merit in the argument that the assessed income matched the return, emphasizing that late filing of returns constituted concealed income under Explanation 3 to section 271(1)(c).

6. The Tribunal dismissed the appeal, stating that the returns were not filed within the specified time limits, rendering them invalid under section 139(4) of the Act. The argument that returns were filed within the time allowed under section 153(1) was deemed insufficient to mitigate the penalty under section 271(1)(c). No additional points were raised during the hearing, and the appeals were ultimately dismissed.