2013 (7) TMI 848 - HC - Income Tax

Penalty u/s 271(1) - Whether the Tribunal was justified in confirming the levy of penalty in the absence of recording of satisfaction within the meaning of section 271(1)(c) before initiation of the proceedings under section 271(1)(c) - the contention of the appellant that recording of a satisfaction is absent in the instant case is wholly without reason - section 271(1B) the satisfaction being a deemed satisfaction the question of recording of satisfaction within the meaning of section 271(1)(c) does not arise for consideration decided in favour of revenue. Validity of Penalty - Whether the Tribunal is justified in confirming the penalty even though the discrepancy alleged was on March 22, 1999 (date of survey) relating to the assessment year 1999-2000 and the impugned penalty was levied for the assessment year 1995-96 even though no discrepancy whatsoever was found relating to the year, under challenge - From the replies of the assessee it is evident that a substantial discrepancy was found for the assessment year 1995-96 - assessee has also admitted to the same - the Tribunal was justified in confirming the penalty decided in favour of revenue. Validity of revised return - Whether the appellant having filed the revised return of income voluntarily and the penalty u/s 271(1)(c) was exigible - The assessee admitted the concealment and, consequently, filed a revised return wherein the admitted undisclosed income as well as the undisclosed stock was disclosed in the return - it cannot be considered as a return of income having been filed voluntarily thus the assessee is liable for penalty decided in favour of revenue. Following precedents - Whether the Tribunal was justified in contradicting from its own findings given in the cases relied upon before it - Tribunal was justified in applying the law to the facts and circumstances of the present case - the questions of law and the decisions are necessarily based on the facts and circumstances of each of the cases - the said question of law is answered with reference to and in terms of the facts and circumstances of the relevant cases - therefore when the facts in two cases are different, applying the cited decision to another case would be highly erroneous decided in favour of revenue appeal decided against assessee.

Issues involved:
1. Levy of penalty under section 271(1)(c) for concealed income.
2. Justification of penalty for assessment year 1995-96 based on discrepancies found in 1999.
3. Exigibility of penalty when revised return was voluntarily filed.
4. Tribunal's contradiction from its own findings in cited cases.

Analysis:

Issue 1: Levy of penalty under section 271(1)(c) for concealed income
The assessee, a jeweler, filed a revised return after discrepancies were found during a survey, admitting to concealed income. The penalty under section 271(1)(c) was imposed for deliberate concealment. The appellant argued that satisfaction under section 271(1)(c) was not recorded. However, section 271(1B) deems satisfaction when penalty proceedings are directed in an assessment order. The Tribunal upheld the penalty, considering the admitted discrepancies and deliberate concealment, leading to the dismissal of the appeal.

Issue 2: Justification of penalty for assessment year 1995-96 based on discrepancies found in 1999
The Tribunal confirmed the penalty for the assessment year 1995-96, even though discrepancies were unearthed in 1999. The assessee admitted to the discrepancies for the relevant assessment year, as evidenced by their responses during the survey. Therefore, the Tribunal's decision to uphold the penalty for the correct assessment year was deemed justified based on the admitted discrepancies.

Issue 3: Exigibility of penalty when revised return was voluntarily filed
The assessee argued that since a revised return was filed voluntarily, the penalty was not exigible. However, the deliberate concealment of income and discrepancies detected during the survey justified the penalty proceedings. Citing relevant case law, the authorities were deemed correct in imposing the penalty, as the revised return was a result of the survey findings, not voluntary disclosure.

Issue 4: Tribunal's contradiction from its own findings in cited cases
The Tribunal's decision to distinguish and not apply cited cases to the present matter was justified. Each case's facts and circumstances differ, and applying precedents incorrectly would be erroneous. Therefore, the Tribunal's decision to base its judgment on the specific facts of the case at hand was upheld, leading to the dismissal of the appeal.

In conclusion, the High Court upheld the penalty under section 271(1)(c) for concealed income, justified the penalty for the correct assessment year based on admitted discrepancies, deemed the penalty exigible despite a voluntary revised return, and supported the Tribunal's decision to apply the law based on the specific case facts. The appeal was dismissed, affirming the authorities' actions as lawful and appropriate.

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