2016 (5) TMI 798 - HC - Income Tax

Revision u/s 264 in favor of assessee - return was filed under Section 139(4) within the time allowed and the return was filed admitting an income of 25, 18, 256/- including the additional income of 25, 00, 000/- offered during the course of survey - Held that - once the income is offered then the same cannot be withdrawn. - When the return of income was filed voluntarily no addition was made and the income returned was accepted without making any addition the petitioner cannot now take a stand that the statement was given only on the threat made by the respondent. As rightly pointed out by the respondent the petitioner cannot plead ignorance and that the income that has to be assessed in the previous years and the income that has to be assessed in the hands of partners are to be excluded. Further the respondent had pointed out that in spite of the assessee has the option to file revised return till 31.03.2002 as per the provisions of Section 139(5) of the Income Tax Act the assessee did not opt to do so. The finding of the respondent that the assessee s contention is a clear after thought is correct. Under this circumstance do not find any reason to interfere with the order passed by the respondent.

Summary

Issues:
1. Petition for writ of certiorarified mandamus to quash an order and grant relief for assessment year 2000-01.
2. Dispute over income admitted during survey under Section 133A of Income Tax Act and subsequent petition under Section 264.
3. Validity of income admission, rejection of petition under Section 264, and assessment of true income.
4. Failure to file revised return under Section 139(5) and challenge to respondent's decision.

Analysis:
1. The petitioner, a Partnership Firm, filed a writ petition seeking relief for the assessment year 2000-01. The firm was engaged in the business of tiles manufacture and rental income. A return admitting income of ?25,18,256 was filed, including additional income of ?25,00,000 offered during a survey under Section 133A. A petition under Section 264 was filed, but the respondent rejected it, stating that once income is admitted, it cannot be withdrawn.

2. The petitioner argued that the income admission during the survey was not voluntary but due to respondent's threat. The respondent rejected the petition under Section 264, citing the timely filing of the return under Section 139(4) and the acceptance of the returned income without additions. The respondent emphasized that the Act requires true income disclosure and filing a return constitutes admission of tax liability.

3. Upon review, it was found that the return was filed within the allowed time, admitting the total income, including the additional amount offered during the survey. The respondent's decision was in line with Supreme Court precedent, emphasizing the duty to disclose true income. The respondent's rejection of the petition under Section 264 was deemed appropriate based on the facts presented.

4. The respondent contended that the petitioner had the option to file a revised return under Section 139(5) but failed to do so. The respondent highlighted that no objections were raised during or after the survey, and the petitioner cannot claim ignorance now. The court upheld the respondent's decision, noting that the petitioner's arguments appeared as an afterthought. Consequently, the writ petition was dismissed, and no costs were awarded, closing the connected matter.