1994 (3) TMI 137 - AT - Income Tax

Summary

Issues Involved:
1. Levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961.
2. Validity of revised returns filed by the assessee.
3. Consideration of concealment of income.

Summary:

Levy of Penalty u/s 271(1)(c):
The assessee filed returns for the assessment years 1985-86, 1986-87, and 1987-88, which were later revised after a survey u/s 133A. The Assessing Officer initiated penalty proceedings due to significant differences between the original and revised returns. The CIT(A) confirmed the penalties, imposed at minimum levels.

Validity of Revised Returns:
The assessee argued that the original returns were based on unaudited accounts due to the auditors' negligence. After appointing a new auditor, the revised returns were filed voluntarily, showing higher income based on audited accounts. The Tribunal noted that the revised returns were filed without any pressure from the Department and should be considered valid.

Consideration of Concealment of Income:
The Tribunal found that the Assessing Officer did not specify the concealed amounts in the penalty orders. The revised returns were accepted in toto by the Department, indicating no concealment. The Tribunal relied on various judgments, including CIT v. J.K.A. Rajappa Chettiar and CIT v. Bengal Iron Galvanising Works, which supported the view that penalties should not be imposed if revised returns are filed voluntarily and accepted by the Department.

Conclusion:
The Tribunal concluded that the penalties u/s 271(1)(c) were not justified as the revised returns were valid and there was no concealment of income. The penalties imposed by the Assessing Officer and confirmed by the CIT(A) were canceled, and the appeals filed by the assessee were allowed.