1976 (10) TMI 50 - AT - Income Tax

Summary

Issues:
Penalty appeals based on concealment of income from properties for multiple assessment years.

Analysis:
The assessee, a Doctor deriving income from profession and property, constructed two houses post-1961 but did not disclose the income from these properties for the relevant assessment years. The Income Tax Officer (ITO) included the income from properties in the assessment for 1965-66 and reopened assessments for 1960-61 to 1964-65 under section 147(A) of the IT Act, 1961. Penalties under section 271(1)(C) were imposed for each assessment year due to non-disclosure. The assessee contended before the Appellate Assistant Commissioner (AAC) that penalties should be canceled as he explained the lack of assessment order copies and that rejection of income figures does not imply concealment. The AAC, citing lack of proof of concealment or wilful neglect, canceled the penalties, leading to a departmental appeal.

The AAC's decision was challenged, with the Department arguing that non-disclosure of property income justifies penalties under section 271(1)(C). The Department emphasized that the penalties were imposed under the substantive provision of the Act and not the Explanation to section 271(1)(C). The assessee's counsel, on the other hand, argued that penalties should be canceled due to non-supply of assessment orders and the lack of intention to conceal income. The admitted facts revealed non-disclosure of property income in original returns, leading to penalties. The concealment in reassessment was linked to the original return filing. The Tribunal concluded that concealment occurred when the original returns were filed and directed the ITO to levy a minimum penalty of 20% of the tax sought to be evaded for the relevant years, with a refund of excess penalty if already collected.

In conclusion, the departmental appeals were allowed, upholding the imposition of penalties for the non-disclosure of property income in the original returns, with the penalty quantified at 20% of the tax sought to be evaded for the respective assessment years.