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Issues:
- Whether penalty can be sustained after the assessee files a revised return before the assessment is completed. - Whether the Explanation to section 271(1)(c) of the Act is applicable if disclosure is made in the revised return. Analysis: The case involved the assessee originally filing a return showing an income of Rs. 13,319, which was later revised to Rs. 57,960 after certain credits were noticed during assessment proceedings. The additional income of Rs. 43,800 from the sale of shares was disclosed in the revised return. The Income Tax Officer (ITO) completed the assessment, reducing the total income to Rs. 59,516, including the capital gains. Subsequently, penalty proceedings were initiated by the Income-tax Appellate Tribunal (ITAT) against the assessee for alleged concealment of income and furnishing inaccurate particulars. The ITAT held that since the income from share transfers was disclosed in the revised return, penalty could not be levied. Additionally, the ITAT found that the failure to disclose the income was an omission and not deliberate concealment by the assessee or the agent handling his tax matters. The Tribunal, therefore, canceled the penalty. The Tribunal's order explicitly considered whether the assessee deliberately concealed the capital gains in the original return and found in favor of the assessee, attributing the omission to inadvertence. As the correctness of this finding was not challenged in the referred questions, the answers naturally followed from the Tribunal's conclusion that there was no intentional concealment or omission. Consequently, the court held both questions against the Revenue, as there was no basis for arguing in their favor. Therefore, the penalty was not sustained, and the assessee was awarded costs for the reference.
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