2015 (5) TMI 870 - HC - Income Tax

Penalty u/s 271(1)(c) - claim of deduction under Section 80-P(2)(d) - Held that - In the case in hand the applicant submitted the revised return and on basis of that tax was recovered. True it is, at the fist instance the assessee claimed exemption as per provisions of Section 80-P(2)(d) of the Act of 1961 but immediately on knowing about its non-applicability a revised return was filed disclosing accurate income. Under Section 271(1)(c) of the Act of 1961 it is required to be seen as to whether the assessee has concealed the income or the details supplied by him in return were found incorrect, erroneous, not accurate, not according to the truth or not exact depiction of the taxable income. No such eventuality in the instant matter exists. The Commissioner of Income Tax as well as the Income Tax Appellate Tribunal after examining the entire record arrived at the conclusion that first return submitted by assessee Udaipur Central Cooperative Bank Ltd. was a bonafide error and that was immediately rectified by submitting a revised return. In this factual background we do not find any substantial question of law that may demand adjudication by us by entertaining an appeal as per provisions of Section 260-A of the Income Tax Act, 1961. - Decided in favour of assesse.

Summary

Issues:
Penalty imposition for concealment of income under Section 271(1)(c) of the Income Tax Act, 1961.

Detailed Analysis:
The respondent, a bank providing credit facilities, initially declared no taxable income in its return but later filed a revised return showing taxable income. The Assessing Officer imposed a penalty for concealment of income. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal both ruled in favor of the respondent, stating that the revised return was filed without any ulterior motive. The revenue argued that the initial claim was an attempt to conceal income, but the court found no merit in this argument. The court emphasized that the revised return declared complete and accurate income, with no evidence of conscious effort to conceal income.

The court referred to the Supreme Court's judgment in Commissioner of Income Tax v. Reliance Petroproducts Pvt. Ltd., emphasizing the need for concealment or furnishing inaccurate particulars of income for penalty under Section 271(1)(c). The court highlighted that the details supplied in the return must be inaccurate, erroneous, or false to attract the penalty. In this case, as no details in the return were found incorrect, the penalty under Section 271(1)(c) was deemed unwarranted. The court clarified that a mere unsustainable claim in the return does not amount to furnishing inaccurate particulars of income.

The court concluded that the respondent rectified the initial error by submitting a revised return promptly, disclosing accurate income. As there was no concealment or inaccurate details in the return, the penalty under Section 271(1)(c) was not applicable. The Commissioner of Income Tax and the Income Tax Appellate Tribunal also found the initial error to be a genuine mistake, leading to the acceptance of the revised return. Therefore, the court dismissed the appeal, stating that there was no substantial question of law requiring further adjudication under Section 260-A of the Income Tax Act, 1961.