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2018 (6) TMI 841 - HC - Income TaxPenalty under Section 271(1)(c) - whether the Assessee is guilty of concealment of income which is deliberate - Additional income declared by the assessee by filing revised return consequent to notices u/s.143(2) and 142(1) - factual matrix - substantial question of law - Held that - There is no debatable question of law of substance necessary for determining the rights of the parties in the case. This is just a case where the question as to whether the assessee is liable to be mulcted with penalty under Section 271(1)(c) of IT Act in the given fact scenario / conduct needs to be answered. Therefore we have no hesitation whatsoever in holding that the proposed questions of law are definitely not substantial questions of law. We are of the view that they may not even qualify as pure questions of law as they are all turning heavily on facts. We have held elsewhere in this judgment that the factual findings returned by the CIT and ITAT are held to be conclusive as we are sitting in Section 260A of the IT Act. Assessee is not guilty of deliberate concealment of income and is not liable to be mulcted with penalty under Section 271(1)(c) - Decided in favour of assessee.
Issues Involved:
1. Advances not shown as income in the assessment year. 2. Disallowance due to non-furnishing of proof for TDS remittance. 3. Imposition of penalty under Section 271(1)(c) of the IT Act. Issue-Wise Detailed Analysis: 1. Advances Not Shown as Income: The Assessee, a cine artist and model, initially filed her return for the assessment year 2010-2011 showing an income of ?89,69,894/-. A revised return was later filed admitting a total income of ?4,41,40,950/-. The difference of ?3,51,71,053/- was the advance received from various cinema producers. The original return did not show these advances as income, although they were listed in the balance sheet. This issue was scrutinized, and it was determined that the Assessee was under a bona fide belief that advances need not be shown as income in the same assessment year. 2. Disallowance Due to Non-Furnishing of Proof for TDS Remittance: The AO disallowed expenses towards audit fees, commission and brokerage, professional charges, and security charges due to the Assessee's failure to provide proof of TDS remittance into the government account. This disallowance amounted to ?24,05,062/- under Section 40(a)(ia) of the IT Act. Both CIT and ITAT concluded that this was an inadvertent error by the accountant, not a deliberate concealment. 3. Imposition of Penalty Under Section 271(1)(c) of the IT Act: The penalty of ?1,16,11,020/- was imposed by the Revenue for alleged concealment of income. However, both CIT and ITAT found no deliberate suppression or concealment by the Assessee. The Assessee had shown the advances in the balance sheet, indicating no intention to conceal. The revised return was filed in compliance with CIT orders from previous years, not due to the Section 143 notice. The court found the Revenue's reliance on previous case laws (MAK Data (P.) Ltd. and N.Ranjit) distinguishable on facts. The court also emphasized that the application of penal provisions is not automatic and depends on the facts and circumstances of each case. Conclusion: The High Court concluded that the Assessee did not deliberately conceal income and was not liable for penalty under Section 271(1)(c) of the IT Act. The factual findings by CIT and ITAT were deemed conclusive. The questions proposed by the Revenue were not substantial questions of law, and the appeal was dismissed. The court confirmed the ITAT's order, which upheld the CIT's decision to set aside the penalty imposed by the Deputy Commissioner of Income Tax. The parties were left to bear their respective costs.
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