1981 (5) TMI 58 - AT - Income Tax

Summary

Issues Involved:
1. Concealment of income.
2. Validity of penalty under Section 271(1)(c) of the Income Tax Act.
3. Timeliness of penalty notice.
4. Voluntariness of the return filed on 4th March 1975.

Detailed Analysis:

1. Concealment of Income:
The primary issue revolves around whether the assessee concealed income in the original return filed on 20th June 1972. The Income Tax Officer (ITO) determined that the assessee did not disclose income from business related to Jeep No. TRT-554 and capital gains from the sale of a plot of land. The reassessment conducted on 24th December 1975 revealed a total income of Rs. 23,170, significantly higher than the originally declared Rs. 13,766. The Tribunal concluded that the assessee had indeed concealed particulars of income in the original return.

2. Validity of Penalty under Section 271(1)(c):
The ITO imposed a penalty of Rs. 9,399 under Section 271(1)(c) of the Income Tax Act, which was upheld by the Appellate Assistant Commissioner (AAC). The Tribunal agreed with the tax authorities, stating that the concealment of income was evident and the penalty was justifiable. The Tribunal noted that the assessee failed to provide any material or plausible explanation to displace this conclusion.

3. Timeliness of Penalty Notice:
The assessee argued that the penalty notice was issued beyond the statutory time limit. However, the Tribunal found that the penalty order was not barred by limitation. The observations of the tax authorities in this regard were deemed correct, and the Tribunal upheld the penalty order.

4. Voluntariness of the Return Filed on 4th March 1975:
A significant point of contention was whether the return filed on 4th March 1975 was voluntary or pursuant to a notice under Section 147/148. The assessee claimed it was voluntary, while the tax authorities contended it was in response to a notice. The Tribunal noted that this issue was raised for the first time before them and was not investigated by the tax authorities. The Tribunal found no evidence to support the assessee's claim of voluntariness and concluded that the return was filed in response to the notice. Consequently, the return could not be considered a revised return under Section 139(5).

Conclusion:
The Tribunal dismissed the appeal, upholding the penalty order imposed by the ITO and confirmed by the AAC. The Tribunal found that the assessee had concealed income in the original return and that the penalty under Section 271(1)(c) was valid and timely. The argument that the return filed on 4th March 1975 was voluntary was rejected due to lack of evidence and late introduction of the claim.