1992 (3) TMI 161 - AT - Income Tax

Summary

Issues:
- Appeal against the order of CIT(A) confirming penalty under section 271(1)(c) of the Income-tax Act, 1961.
- Whether the excise refund constituted income under section 41(1) for the assessment year 1987-88.
- Whether the assessee concealed income by not offering the excise refund as income.
- Whether the penalty under section 271(1)(c) was justified.
- Whether the penalty was levied with the approval of the Dy. CIT.

Analysis:

1. The appeal was filed against the order of CIT(A) confirming the penalty under section 271(1)(c) of the Income-tax Act, 1961. The assessee contended that the order was bad in law, barred by limitation, and passed without the approval of the Dy. CIT. The firm, engaged in the tobacco business, received an excise duty refund, which the ITO treated as income under section 41(1) for the assessment year 1987-88.

2. The ITO concluded that the excise refund constituted income and penalized the assessee for not offering it as income. The CIT(A) upheld the penalty, emphasizing the conduct of the assessee as seen from the books of account. The CIT(A) referred to case law to support the view that non-disclosure of deemed income amounted to concealment of income, justifying the penalty under section 271(1)(c).

3. The assessee argued that there was no intention to conceal income as there was a possibility of a demand being raised against them. They contended that the inclusion of income under section 41(1) was not disputed, and they paid tax on the deemed income. The assessee also highlighted discrepancies in the charges of concealment of income between the ITO and CIT(A) in a similar case.

4. The Tribunal upheld the order of CIT(A), stating that the excise refund was deemed income under section 41(1) and the failure to disclose it amounted to concealment. The Tribunal rejected the argument that the footnote in the computation statement constituted disclosure of primary facts, emphasizing the duty of the assessee to point out material facts to the Assessing Officer.

5. The Tribunal found no disparity between the charges of inaccurate particulars of income and concealment of income, as the penalty under section 271(1)(c) covers both. The Tribunal distinguished the case law cited by the assessee, emphasizing that the non-disclosure of deemed income led to concealment of income, justifying the penalty.

6. The Tribunal dismissed the appeal, upholding the penalty under section 271(1)(c) for the concealment of income related to the excise duty refund. The argument on the point of limitation was not addressed during the proceedings.