2018 (9) TMI 1921 - HC - Income Tax

Penalty u/s 271(1)(c) - concealment of income or furnishing any inaccurate particulars - HELD THAT - In the case of MAK Data P. Ltd. vs. Commissioner of Income Tax-II 2013 (11) TMI 14 - SUPREME COURT there was no explanation by the assessee for the concealed income and in absence of any explanation in respect of the surrendered income the Apex Court has held that the law does not provide that when an assessee makes a voluntary disclosure of his concealed income he had to be absolved from penalty. The voluntary disclosure does not release the assessee from the mischief of penal proceedings and dismissed the appeal of the assessee. In the light of the law laid down by the Delhi High Court in the case of Suraj Bhan 2006 (4) TMI 107 - PUNJAB AND HARYANA HIGH COURT has held that penalty levied is not justified because there was no concealment of income nor furnishing any inaccurate particulars thereof. The facts of the case in the case of MAK Data P. Ltd. (supra) is distinguishable and will not be applicable in the present facts and circumstances of the case. On due consideration of the aforesaid it cannot be said that learned ITAT has not appreciated the evidence of the AO and the order passed by the Appellate Authority. In the case in hand the return was revised much prior to the date of issuance of notice under Section 153-C of the Act. The AO has no-where recorded his satisfaction to the fact that the assessee has concealed the particulars of income or furnished any inaccurate particulars of such income. Thus we are of the view that there is no illegality in the order passed by the learned ITAT nor any substantial question of law is arising in this appeal.

Summary

Issues:
- Concealment of income and inaccurate particulars
- Penalty under Section 271(1)(c) of the Income Tax Act, 1961
- Revised return filing beyond the allowed time limit
- Applicability of precedents in penalty imposition cases

Concealment of Income and Inaccurate Particulars:
The case involved an appeal under Section 260-A of the Income Tax Act against a decision by the Income Tax Appellate Tribunal. The Tribunal had allowed the appeal of the assessee, stating that there was no concealment of income or furnishing of inaccurate particulars, thus canceling a penalty of ?1,10,00,000 levied under Section 271(1)(c) of the Act. The facts revolved around a revised return filed by the assessee showing additional income from capital gains related to disputed land transactions.

Penalty under Section 271(1)(c) of the Income Tax Act, 1961:
The Commissioner of Income Tax (Appeals) had affirmed the penalty, concluding that the additional income from capital gains was meant to be concealed, as it was not shown in the original or subsequent returns. However, the Appellate Tribunal found that the revised return was filed much before the notice under Section 153-C of the Act, and no documentary evidence was found to support the Assessing Officer's assertion of intentional concealment.

Revised Return Filing Beyond Allowed Time Limit:
The Assessing Officer had imposed the penalty based on the revised return filed beyond the time allowed under Section 139(5) of the Act. The Commissioner held that the revised return would not save the assessee from consequences of intentional filing of false returns. However, the Tribunal noted that the return was revised before the notice under Section 153-C was issued, indicating no intentional concealment.

Applicability of Precedents in Penalty Imposition Cases:
The Tribunal referred to precedents from various High Courts, emphasizing that penalty cannot be imposed solely based on a revised return showing higher income. It highlighted cases where penalties were not levied due to revised returns or withdrawn claims. The Tribunal concluded that the penalty in this case was not justified as there was no concealment of income or furnishing of inaccurate particulars, aligning with legal principles established in previous judgments.

In conclusion, the High Court dismissed the income tax appeal filed by the Revenue, stating that there was no illegality in the order passed by the Appellate Tribunal. The Court found no substantial question of law arising and upheld the Tribunal's decision to cancel the penalty, based on the lack of evidence supporting intentional concealment of income or furnishing of inaccurate particulars.