2015 (3) TMI 500 - HC - Income Tax

Penalty u/ s. 271(1)(c) - concealed income being the peak credits in the bank account of the assessee and his family members - ITAT deleted levy - Held that - As per the order of the CIT (Appeals) the assessee has given justification for showing additional income in the subsequent return vide letter dated 02.10.2006. Had the letter not inwarded and it was mere say coupled with the aspect that no such letter was available as per AO in the file matter may be different but when the letter was already inwarded whether it was sent to the AO by the concerned office would not impair the aspect of bonafide or the aspect of voluntary disclosure of taxable income. The aspect of bonafide or nonconcealment of the income is essentially a question of fact. When the first appellate authority and the second appellate authority viz. Tribunal which is the ultimate fact finding authority after the consideration of the evidence has found that there was no concealment of the income further scrutiny by way of reappreciation of evidence in the appeal before this Court would be beyond the scope of the present appeal. - No interference is called for to the impugned order of the Tribunal. - Decided in favour of assessee.

Summary

Issues involved:
Whether the Appellate Tribunal erred in deleting penalty under section 271(1)(c) of the Income Tax Act based on the revised return filed by the assessee, the concealment of income, and the bonafide disclosure of additional income.

Analysis:
The case involved an appeal by the Revenue challenging the deletion of a penalty of Rs. 1,61,66,230 under section 271(1)(c) of the Income Tax Act. The primary issue was whether the Tribunal erred in deleting the penalty based on the revised return filed by the assessee and the circumstances surrounding it. The facts revealed that the assessee initially filed a return for the assessment year 2005-2006, showing a taxable income of Rs. 5,52,179. Subsequently, a revised return was filed on 31.03.2006, declaring a total income of Rs. 4,44,82,930. The assessment was finalized at Rs. 4,81,14,680. The penalty was imposed by the Assessing Officer, but the CIT (Appeals) deleted it, citing the voluntary disclosure of additional income by the assessee during assessment proceedings.

The Tribunal analyzed the case and referred to relevant legal precedents to determine the validity of the penalty deletion. It noted that the investigation by the Assessing Officer commenced after a notice issued on 24-8-2007, and there was no material to show that the department detected additional income before the revised return was filed. The Tribunal distinguished a previous case where penalty was upheld due to detection during a survey, highlighting that in the present case, no such detection occurred before the revised return was filed. Additionally, the Tribunal cited decisions emphasizing that voluntary disclosure of additional income during assessment proceedings does not constitute concealment under section 271(1)(c) of the Act.

The Revenue contended that the second return filed by the assessee was beyond the time limit, suggesting concealment. However, the Court held that the justification provided by the assessee for the additional income, coupled with the inwarded letter explaining the bank account transactions, supported the bonafide disclosure of income. The Court emphasized that the determination of bonafide disclosure is a factual question, and both the CIT (Appeals) and the Tribunal had found no concealment of income.

Ultimately, the Court concluded that no substantial question of law arose for consideration in the appeal, as the findings of the lower authorities regarding the bonafide disclosure of income were upheld. The appeal by the Revenue was deemed meritless, and the impugned order of the Tribunal was upheld, leading to the dismissal of the present appeal.