1981 (3) TMI 55 - HC - Income Tax

Summary

Issues involved:
The issues involved in this case are the legality of penalty proceedings initiated under section 271(1)(c) of the Income Tax Act, the validity of penalties imposed by the Income-tax Appellate Tribunal, and the challenge against various orders of penalties and notices of demand issued by the Income Tax Officer.

Details of the Judgment:

1. Initiation of Penalty Proceedings:
The petitioners challenged the penalty proceedings on various grounds, including the premature initiation of penalty proceedings by the Income Tax Officer (ITO) under section 271(1)(c) while their application under section 271(4A) was pending before the authorities. The petitioners argued that they made a voluntary disclosure based on promises made by the authorities that no penalty would be imposed. The court held that the penalty provisions were not dependent on section 271(4A) and that the imposition of penalty was not premature, as the authorities did not approve the waiver of penalty before penalties were imposed.

2. Concealment of Income:
The court examined section 271(1)(c) of the Income Tax Act, which allows for the imposition of penalties if the assessee has concealed income or furnished inaccurate particulars. The petitioners had voluntarily disclosed their income, but the court found that they had previously concealed income in their returns filed before the disclosure scheme. Therefore, the court concluded that the petitioners had indeed concealed income, justifying the imposition of penalties.

Conclusion:
The court dismissed the petition, ruling in favor of the respondents. The court held that the penalty proceedings were valid and that the petitioners had concealed income, warranting the imposition of penalties. The court discharged the rule and ordered the parties to bear their own costs.