1980 (12) TMI 91 - AT - Income Tax

Summary

Issues:
Imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961.
Jurisdiction of the Income Tax Appellate Tribunal (ITAT) regarding concealment of income and penalty imposition.

Analysis:
The case involved an appeal against the imposition of a penalty of Rs. 11,000 under section 271(1)(c) of the Income Tax Act, 1961. The assessee initially declared an income of Rs. 46,880 from business in the return filed on 2nd Sept., 1973. Subsequently, the assessee revised the return on 29th Jan., 1976, declaring an income of Rs. 57,600, which included a sum of Rs. 10,720 as income from other sources. The Income Tax Officer (ITO) assessed the income on 20th March 1976 at Rs. 89,811, which included the surrendered amount of Rs. 10,720, and initiated penalty proceedings under section 271(1)(c) of the Act.

The matter was referred to the Income Tax Appellate Tribunal (ITAT) by the ITO under section 274(2) of the Act, as the minimum penalty imposable exceeded Rs. 25,000. The ITAT passed an order on 27th Sept., 1979, levying a penalty of Rs. 11,000. The assessee appealed, contending that there was no evidence of concealment and that the reference to the ITAT was without jurisdiction due to the omission of section 274(2) from the statute.

Upon careful consideration, the ITAT found that the assessee could not be held guilty of concealment. The ITAT noted that the assessee voluntarily surrendered the amount of Rs. 10,720 by filing a revised return before any alleged concealed income was identified or a case of concealment was established. The ITAT concluded that there was no prima facie evidence of concealment against the assessee. Consequently, the ITAT canceled the penalty of Rs. 11,000 imposed by the ITAT, thereby allowing the appeal.

In light of the finding that the assessee was not guilty of concealment, the ITAT did not delve into the jurisdictional issue regarding the ITAT's authority over the case. The ITAT's decision to cancel the penalty was based on the lack of evidence supporting concealment by the assessee, as the revised return was filed voluntarily before any concealment was identified.