1990 (1) TMI 103 - AT - Income Tax

Summary

Issues:
- Appeal against penalty under section 271(1)(c) of the Income-tax Act, 1961 for assessment year 1980-81.

Analysis:
1. The appeal was filed by the assessee against the penalty of Rs. 72,634 imposed by the ITO under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 1980-81. The assessee argued that there was no material to justify the penalty as they rectified a mistake by filing a revised return after realizing an error. The counsel contended that the penalty was unwarranted based on precedents cited before the revenue authorities.

2. The Departmental Representative, on the other hand, asserted that the assessee deliberately attempted to suppress taxable income by engaging in hawala transactions. It was argued that the revised return was filed only after the concealment was detected by the ITO, indicating mala fide intentions. Precedents such as Dayabhai Girdharbhai v. CIT and others were cited to support the contention that filing a revised return after detection of concealment does not absolve the assessee from penalties under section 271(1)(c).

3. The Tribunal considered both arguments and examined the facts of the case. It was observed that the assessee had made hawala purchases which were questioned by the ITO through enquiries. The Tribunal noted that the assessee filed the revised return only after receiving a letter from the ITO, indicating awareness of the detection of bogus dealings. The Tribunal emphasized that a revised return can only be filed for unintentional omissions or mistakes, not for concealment or false statements. In this case, the concealment was already detected, and the assessee knowingly filed a false statement.

4. The Tribunal highlighted that the assessee's attempt to include concealed income through a revised return did not qualify as a bona fide mistake. The Tribunal concluded that the penalty under section 271(1)(c) was justified based on the legal position and the facts of the case. Therefore, the appeal by the assessee was dismissed, upholding the penalty imposed by the ITO.