1983 (4) TMI 113 - AT - Income Tax

Summary

Issues:
1. Imposition of penalties under section 271(1)(c) of the Income-tax Act, 1961.
2. Voluntary disclosure of income concealment by the assessee.
3. Interpretation of a public advertisement by the CBDT regarding penalties.
4. Validity of penalties imposed despite the advertisement.

Detailed Analysis:
1. The judgment deals with the imposition of penalties under section 271(1)(c) of the Income-tax Act, 1961. The appeals were directed against the penalties imposed on the assessee for concealment of income in the original returns for assessment years 1963-64 to 1967-68.

2. The assessee, an individual, initially filed returns with original assessments made. Subsequently, the assessee voluntarily disclosed the concealment of income and filed revised returns showing the real income. The penalties were imposed based on the revised returns being treated as an admission of concealment, despite the assessee's plea for waiver of penalties.

3. The appeal raised the issue of the interpretation of a public advertisement by the CBDT regarding penalties. The assessee argued that the advertisement waived the penalties imposable on voluntary disclosure of income concealment. The department contended that penalties were still imposable unless there was a specific order of waiver.

4. The tribunal considered the rival submissions and held that the assessee was entitled to succeed. The tribunal analyzed the advertisement issued by the CBDT, which suggested that filing revised returns to disclose concealed income would not invite penalties. The tribunal emphasized the doctrine of promissory estoppel and concluded that the department could not resile from the position indicated in the advertisement. The tribunal found that the penalties imposed were not justified in light of the policy statement of the department and canceled the penalties, allowing the appeals.