1991 (5) TMI 115 - AT - Income Tax

Summary

Issues Involved:
1. Penalty under section 273(1)(b) for failure to file the estimate of income.
2. Penalty under section 271(1)(a) for delay in filing the return of income.
3. Applicability of the Amnesty Scheme to the penalties imposed.

Issue-wise Detailed Analysis:

1. Penalty under Section 273(1)(b):

The assessee appealed against the penalty of Rs. 80,400 (reduced from Rs. 90,000 by the CIT (Appeals)) imposed under section 273(1)(b) for failing to file the estimate of income. The assessee argued that the return was filed under the Amnesty Scheme, which should exempt them from penalties. The key contention was that the deposit of Rs. 3 lakhs in the bank account was voluntarily disclosed before any concrete detection by the department. However, the Tribunal found that the revenue already knew about the bank account and had issued prohibitory orders and a notice under section 139(2) before the return was filed. Thus, the return was not considered voluntary, and the Amnesty Scheme benefits were not applicable. The Tribunal upheld the penalty but reduced it to the minimum of 10%, amounting to Rs. 10,072, due to the absence of specific reasons for a higher penalty.

2. Penalty under Section 271(1)(a):

The penalty of Rs. 2,860 under section 271(1)(a) was imposed for the delay in filing the return of income. The assessee claimed immunity under the Amnesty Scheme and cited the ailment of a partner as a reason for the delay. However, the Tribunal noted that the Amnesty Scheme benefits for section 271(1)(a) were not extended to the assessment year 1986-87. Additionally, the evidence provided (a medical certificate) did not sufficiently justify the delay from 31-7-1986 to 3-9-1986. Therefore, the Tribunal confirmed the penalty for late filing.

3. Applicability of the Amnesty Scheme:

The Amnesty Scheme, as per the CBDT Circular No. 453 dated 4-4-1986, required that the disclosure be voluntary, in good faith, and made before the detection of concealment by the department. The Tribunal found that the disclosure by the assessee did not meet these criteria because the revenue had already initiated enquiries and issued prohibitory orders before the return was filed. Consequently, the benefits of the Amnesty Scheme were not available to the assessee for both penalties under sections 273(1)(b) and 271(1)(a).

Conclusion:

The Tribunal partially allowed the appeal regarding the penalty under section 273(1)(b) by reducing it to Rs. 10,072 but upheld the penalty under section 271(1)(a) in full. The assessee's reliance on the Amnesty Scheme was rejected due to the lack of voluntary disclosure and the specific exclusions for the assessment year 1986-87.