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of <h1>Assessee's Deliberate Concealment of Income: Revised Return Not a Shield Against Penalties</h1> The Bombay High Court, in a judgment delivered by Tendolkar, J., held that an assessee can be penalized under section 28(1)(c) of the Indian Income-tax ... - Issues:Whether an assessee is liable to be penalized under section 28(1)(c) of the Indian Income-tax Act for concealing income in the original return despite filing a revised return disclosing the concealed amount.Analysis:The judgment by the Bombay High Court, delivered by Tendolkar, J., addressed the issue of whether an assessee can be penalized under section 28(1)(c) of the Indian Income-tax Act for concealing income in the original return despite subsequently filing a revised return disclosing the concealed amount. The case involved the assessee filing a return of income-tax for the assessment year 1951-52, initially declaring an income of Rs. 11,292. However, upon scrutiny by the Income-tax Officer, it was discovered that the assessee had concealed income by showing a gross loss on disclosed sales. Subsequently, the assessee filed a revised return declaring an income of Rs. 22,653, claiming the earlier omission was due to oversight. The Income-tax Officer assessed the assessee under the proviso to section 13 and imposed a penalty for deliberate concealment of income in the original return.The primary contention raised on behalf of the assessee was that the right to file a revised return under section 22, sub-section (3) should absolve them of any penalty for concealing income in the original return. However, the court clarified that while an assessee has the right to file a revised return to correct accidental omissions, deliberate concealment attracts penalties under section 28(1)(c). The court emphasized that the determination of whether the omission was deliberate or bona fide is a factual inquiry for the Income-tax authorities, and the subsequent filing of a revised return does not automatically negate penalties for deliberate concealment.Furthermore, the court rejected the argument that since the concealed income did not impact the total sales on which the assessment was based, the penalty should not apply. The court clarified that the focus of section 28(1)(c) is on whether the original return concealed income or furnished inaccurate particulars, irrespective of the impact on the final tax liability. Additionally, the court dismissed the contention that since the final income figure matched the revised estimate, no penalty should be imposed, reiterating that the accuracy of the final assessment does not excuse deliberate concealment in the original return.Ultimately, the court held that the assessee was rightly subjected to a penalty under section 28(1)(c) for deliberate concealment of income in the original return, affirming that the assessee was liable to the penalty as determined by the Income-tax authorities. The court also dismissed a notice of motion seeking to amend the question raised in the reference, stating that the original question adequately addressed the issue at hand, and ordered the assessee to pay the costs of the reference.In conclusion, the judgment underscores the distinction between accidental omissions and deliberate concealment in income tax filings, affirming that penalties under section 28(1)(c) apply to cases of intentional concealment, regardless of subsequent corrections through revised returns.
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