1978 (9) TMI 16 - HC - Income Tax

Summary

Issues involved: Assessment of income, filing of revised returns, imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961.

Assessment Years 1965-66 to 1967-68:
The assessee, a partner in two firms, filed original returns for the years 1965-66 to 1967-68, later filing revised returns showing higher incomes. The Income Tax Officer (ITO) suspected concealment and referred the matter to the Income-tax Appellate Commissioner (IAC) who imposed penalties. The Tribunal found the revised returns were voluntary for 1965-66 but not for the subsequent years due to wilful non-disclosure.

Legal Question Raised:
Whether penalty under section 271(1)(c) is imposable when an assessee voluntarily files a revised return after furnishing inaccurate particulars in the original return.

Interpretation of Section 139(5) of the Income-tax Act:
The provision allows for filing a revised return if an assessee discovers any omission or wrong statement, excluding deliberate concealment. Precedents indicate that a revised return cannot supplant the original if deliberate concealment or false statements were made.

Judicial Precedents and Interpretation:
Court decisions emphasize that a revised return can replace the original only if there was no deliberate concealment or false particulars. The Tribunal's findings for each year were analyzed, with penalties justified for 1966-67 and 1967-68 due to wilful non-disclosure, contrary to the provisions of section 139(5).

Court's Decision:
The High Court held that penalty was not imposable for 1965-66 based on the revised return being voluntary. However, penalties for 1966-67 and 1967-68 were upheld as the revised returns did not meet the requirements of section 139(5). The relevant return for penalty purposes was deemed to be the original return, not subsequent filings.

Conclusion:
The court ruled in favor of the department for the assessment years 1966-67 and 1967-68, upholding the penalties imposed. However, for the assessment year 1965-66, the penalty was deemed not imposable based on the voluntary nature of the revised return. The legal fees were assessed at Rs. 200 for the department's counsel.