2007 (6) TMI 116 - HC - Income Tax

Court rules no penalty under Section 271(1)(c) if income disclosed in return

The High Court of Bombay dismissed an application seeking reference on the deletion of a penalty under Section 271(1)(c) of the Income Tax Act, ruling ... Deletion of penalty under Section 271(1)(c) of the Income tax Act - Disclosure in Part IV of the return - Burden on revenue to establish concealment of income or furnishing of inaccurate particulars - No substantial question of law for referenceDisclosure in Part IV of the return - Burden on revenue to establish concealment of income or furnishing of inaccurate particulars - Deletion of penalty under Section 271(1)(c) of the Income tax Act - No substantial question of law - Validity of the Tribunal's deletion of penalty levied under Section 271(1)(c) where the assessee furnished particulars in Part IV of the return - HELD THAT: - The Tribunal found that the assessee had furnished particulars of her income in Part IV of the return together with a legal opinion and, applying the principle in CIT v. Anwar Ali, held that it was for the revenue to prove concealment or furnishing of inaccurate particulars. The High Court observed that this view is consistent with its earlier decision in CIT v. Lullabhai Hirabhai, which treats disclosure in Part IV as negating concealment for purposes of Section 271(1)(c). Having adopted the Tribunal's reasoning and precedent, the Court concluded there is no substantial question of law warranting a reference. [Paras 3, 4]Application for reference dismissed; no substantial question of law found and the Tribunal's deletion of the penalty upheld.Final Conclusion: The High Court refused to refer the question of law, upholding the Tribunal's deletion of the penalty under Section 271(1)(c) on the basis that disclosure in Part IV of the return and the revenue's failure to establish concealment or inaccurate particulars precluded the levy of penalty. The High Court of Bombay dismissed an application seeking reference on the deletion of a penalty under Section 271(1)(c) of the Income Tax Act. The Tribunal ruled that if an assessee discloses income in the return, there is no concealment, and the penalty cannot be levied. The court found no substantial question of law and dismissed the application.