2024 (8) TMI 504 - HC - Income Tax

Review petition - Levy of penalty u/s 271(1)(c) - Tribunal sustaining the levy of penalty u/s 271(1)(c) of the Act with reference to the facts of the present case without providing an opportunity of hearing to the appellant herein/ respondent before them - Review applicant had already paid the entire tax amount for the assessment years in question - HELD THAT - Review applicant has not filed these review applications based on new facts. Further, it is discernible from the records that the materials collected during the search were never put to the Review applicant prior to his filing of the voluntary revised returns of income and there is no material to show that he was aware of the documents collected in the premises of M/s.Apollo Hospitals. In such circumstances, it can be reasonably presumed that there is no deliberate or wilful omission on the part of the Review applicant. The review applicant is on the same footing as that of Dr.R.Gopalakrishnan 2010 (7) TMI 1233 - MADRAS HIGH COURT and he also is entitled to the same relief as Dr.R.Gopalakrishnan was entitled to. Superadded, from the facts obtaining in this case, this Court has no incertitude in holding that the plea of the learned counsel for the Review applicant that the Review applicant is a professional doctor and he has rendered service to thousands of downtrodden people and hence, levying penalty on him would affect his mental status as well as professional career, appears to be bona fide and quite reasonable and hence, merits acceptance. The judgment passed by this court 2023 (12) TMI 1265 - MADRAS HIGH COURT is recalled and the Tax Case Appeals are disposed of by setting aside the order dated 2011 (3) TMI 1835 - ITAT CHENNAI .

Summary

Issues:
Review of judgment dismissing tax case appeals challenging penalty under section 271(1)(c) of the Income Tax Act for assessment years 2003-2006 based on voluntary revised return filed by the applicant.

Analysis:
The Review Applications were filed to challenge the judgment dismissing tax case appeals regarding the levy of penalty under section 271(1)(c) of the Income Tax Act for the assessment years 2003-2006. The applicant raised substantial questions of law regarding the correctness of sustaining the penalty without providing an opportunity for a hearing and despite the voluntary filing of a revised return. The court initially dismissed the appeals, stating it was a case of omission in the first return and the second return was not voluntary. The applicant sought a review, arguing that the revised return was filed voluntarily before any departmental notices were issued. The applicant also highlighted similar cases where penalties were not upheld, emphasizing the bona fides of the revised return filing. The applicant contended that the penalty imposition, considering the tax amount already paid, would cause significant harm to his professional career. The respondent argued that the issues in the present case and other cases were not identical, urging dismissal of the review applications.

The court noted that the scope of review is limited to specific grounds, such as new evidence, errors on the face of the record, or other sufficient reasons. The applicant claimed that the revised return was filed voluntarily before any departmental notices were issued, emphasizing the lack of deliberate omission. The court referenced a similar case involving Dr. R. Gopalakrishnan, where penalties were not imposed due to the absence of deliberate suppression. Despite the respondent's argument that the cases were distinguishable, the lack of evidence supporting this assertion led the court to view the applicant similarly to Dr. R. Gopalakrishnan. The court also considered the potential impact of penalty imposition on the applicant's professional career, acknowledging the reasonable concerns raised.

Consequently, the court recalled the previous judgment and disposed of the tax case appeals by setting aside the Tribunal's order imposing penalties. The review applications were allowed, with no costs awarded.