2019 (8) TMI 162 - HC - Income Tax

Penalty u/s 271(1)(c) - concealment detected in the course of any proceeding under the Act, which cannot be limited to assessment proceeding and should have been held to include survey proceeding u/s 133A(1) - Whether Appellate Tribunal erred in not appreciating that even clause (a) of explanation 4 to section 271(1)(c) does not refer to returned income so as to limit the penalty u/s 271(1)(c) with reference to difference between tax on Assessed Income and Returned Income? - HELD THAT - We dismiss this Tax Appeal in view of the order dictated today by us in SHREE SAI DEVELOPERS 2019 (8) TMI 59 - GUJARAT HIGH COURT wherein held no error not to speak of any error of law could be said to have been committed by the Tribunal in passing the Impugned order. This Tax Appeal also fails and is hereby dismissed.

Summary

Issues Involved:
Appeal against order of Income Tax Appellate Tribunal regarding deletion of penalty under Section 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 2013-14.

Analysis:

1. Issue 1 - Deletion of Penalty:
The primary issue in this case was the deletion of the penalty of ?3,10,02,580/- levied under Section 271(1)(c) of the Income Tax Act. The Appellate Tribunal had deleted the penalty, prompting the Revenue to appeal. The Revenue raised the question of whether the Tribunal was correct in deleting the penalty. The Tribunal's decision was crucial in this matter, as it directly impacted the penalty imposed under the Act.

2. Issue 2 - Scope of Penalty Provision:
Another significant issue raised by the Revenue was regarding the scope of penalty under Section 271(1)(c) of the Act. The Revenue contended that the penalty should not be limited to assessment proceedings but should also cover concealment detected in survey proceedings under Section 133A(1). This raised a question of interpretation of the penalty provision and whether it extended to various types of proceedings beyond assessment.

3. Issue 3 - Interpretation of Explanation 4 to Section 271(1)(c):
The third issue highlighted was the interpretation of clause (a) of explanation 4 to Section 271(1)(c). The Revenue argued that even this clause did not limit the penalty to the difference between tax on Assessed Income and Returned Income. This interpretation question was crucial in determining the extent and applicability of penalties under the Act.

In the final judgment, the Court dismissed the Tax Appeal, citing a previous order in a related case. The decision to dismiss the appeal indicates that the Court upheld the Tribunal's decision to delete the penalty. This judgment provides clarity on the interpretation of penalty provisions under the Income Tax Act and emphasizes the importance of considering various circumstances and proceedings while determining the applicability of penalties.