2015 (10) TMI 1476 - AT - Income Tax

Penalty under section 271(1)(c) - reopening of assessment - Held that - The assessee in this case has suo motu offered the additional income and the same was not detected during any course of action by the Revenue authorities against the assessee. Under such circumstances, it cannot be said to be a case where any concealment of income is detected against the assessee inviting penalty action under section 271(1)(c) of the Act. Hence, it cannot be said to be a case of concealment of income by the assessee so far as the assessment proceedings under section 147 are concerned. The assessment proceedings under section 147, as discussed above, were carried out just to validate the invalid revised return and not on account of any detection of escapement of income. In view of the above, we do not find it as a case fit for levy of penalty under section 271(1)(c). The penalty so levied by the lower authorities is, therefore, ordered to be deleted. - Decided in favour of assessee.

Summary

Issues:
- Confirmation of penalty under section 271(1)(c) of the Income-tax Act, 1961 for assessment years 1998-99 to 2000-01.

Analysis:
The appeals were filed against the orders of the Commissioner of Income-tax (Appeals) confirming the levy of penalty under section 271(1)(c) of the Income-tax Act, 1961. The case involved the assessee filing a revised return beyond the prescribed time limit, declaring additional income from a firm. The Assessing Officer initiated penalty proceedings, alleging concealment of income. The main contention was whether the revised return was voluntary or filed under constraint after detection of bogus firms operated by a chartered accountant. The first appeal upheld the penalty, leading to the appeals before the Appellate Tribunal.

For the assessment year 1998-99, the Assessing Officer held the revised return was not voluntary but filed due to detection of bogus firms, leading to concealment of income. However, the Tribunal noted that no concealment was detected during the original assessment, and the reassessment was done to validate the additional income offered by the assessee. Since no concealment was detected during any proceedings, the Tribunal held that penalty under section 271(1)(c) was not justified, and the penalty was deleted.

Regarding the appeals for assessment years 1999-2000 and 2000-01, the Tribunal found the facts identical to the earlier case. Considering the absence of concealment detection during any assessment proceedings, the penalty under section 271(1)(c) was deemed unjustified, leading to the deletion of penalties in these cases as well.

In conclusion, the Appellate Tribunal allowed all the appeals, ruling in favor of the assessee and ordering the deletion of penalties imposed under section 271(1)(c) for the respective assessment years.