1992 (10) TMI 118 - AT - Income Tax

Summary

Issues:
1. Imposition of penalty under sections 271(1)(a) and 271(1)(c) of the Income Tax Act.
2. Action taken by the Assessing Officer under section 155 of the Act based on the Commissioner's order under section 264 of the Act.
3. Validity of penalties imposed for belated returns and concealment of income.
4. Commissioner's power to revise orders subject to appeal before the Tribunal.

Analysis:
The revenue filed appeals objecting to the order of the Appellate Assistant Commissioner regarding the imposition of penalties under sections 271(1)(a) and 271(1)(c) for the assessment years 1963-64 and 1965-66. The common issue in all appeals was the action taken by the Assessing Officer under section 155 of the Act following the Commissioner's order under section 264 of the Act. The revenue contended that the AAC erred in canceling the penalties based on section 155. The revenue further argued that the penalties were imposed after the Commissioner set aside the penalty orders under section 264 of the Act.

The Assessing Officer imposed penalties for belated returns and concealment of income for the assessment years 1963-64 and 1965-66. The penalties were challenged before the AAC, who confirmed the penalties. The CIT, Lucknow, set aside the penalties under section 264 of the Act, directing the AO to give effect to the modifications in the hands of the assessee. The AO invoked section 155 to amend the share from the firm, leading to the re-initiation of penalty proceedings. The AAC canceled the penalties, stating section 155 does not permit penalty initiation, which the revenue disputed.

The Tribunal noted that the AO acted lawfully by initiating penalty proceedings while amending the share from the firm under section 155. However, the Tribunal found the Commissioner exceeded his authority by revising the penalty order for concealment of income, which had been confirmed by the Tribunal. The Commissioner's order setting aside the penalty for concealment was deemed illegal. The Tribunal upheld the cancellation of the penalty for concealment but directed a reassessment of penalties for late filing of returns based on section 271(1) of the Act.

In conclusion, the revenue partially succeeded in the penalty for late filing but failed in the penalty for concealment of income. The Tribunal upheld the cancellation of the penalty for concealment but directed a reassessment of penalties for late filing of returns based on section 271(1) of the Act.