2010 (8) TMI 91 - HC - Income Tax

Penalty u/s 271(1)(c) - ITAT deleted the penalty on account of that the Assessing Officer has not detected any concealment of income before filing of the revised return - as per department AO detected the concealed income vide order under section 143(3) dated 28.12.1989 - Held that - The findings recorded by the Tribunal have not been shown to be perverse in any manner. Consequently deletion of penalty upheld by the Tribunal cannot be faulted.

Summary

Issues:
1. Whether the Tribunal was justified in deleting the penalty imposed under Section 271(1)(c) of the Income Tax Act?
2. Whether the revised return filed by the assessee before the detection of concealment attracts penalty for concealment?
3. Whether the findings of the Tribunal in deleting the penalty were legally sustainable?

Analysis:
1. The High Court considered the appeal filed by the revenue against the order of the Tribunal deleting the penalty imposed under Section 271(1)(c) of the Income Tax Act. The case involved the concealment of income by the assessee, leading to penalty proceedings initiated by the Assessing Officer. The Tribunal upheld the order of the CIT (A) and dismissed the appeal of the revenue, prompting the revenue to approach the High Court for further review.

2. The facts of the case revealed that the assessee filed a revised return declaring additional income before the detection of concealment by the Assessing Officer. The revenue argued that the concealment was detected before the revised return was filed, making the penalty justified. However, the assessee contended that the revised return was filed prior to the detection of concealment, and hence, penalty for concealment was not applicable. The Tribunal, after thorough consideration, found that the revised return was filed voluntarily by the assessee before the detection of concealment, leading to the conclusion that there was no wilful concealment on the part of the assessee.

3. The High Court carefully analyzed the submissions of both parties and the findings of the Tribunal. The Court observed that the Tribunal's decision to delete the penalty was based on the timeline of events, where the revised return was filed before the initiation of penalty proceedings. The Tribunal's reasoning, as highlighted in its observations, indicated that the Assessing Officer had not detected the concealment of income before the filing of the revised returns by the assessee. The Court found no perversity in the Tribunal's findings and upheld the deletion of the penalty, concluding that no substantial question of law arose in the appeals.

In conclusion, the High Court dismissed the revenue's appeals, affirming the Tribunal's decision to delete the penalty imposed under Section 271(1)(c) of the Income Tax Act.