2013 (11) TMI 160 - AT - Income Tax

Assessment Year Penalties Upheld, Relief Granted for Subsequent Years

The Tribunal upheld penalties imposed under section 271(1)(c) of the Income-tax Act for the first assessment year but granted relief for subsequent years ... Penalty u/s 271(1)(c) – During the investigation proceedings of the hospital it was noticed that the assessee has not disclosed income of Rs. 22,77,395 – Held that:- The non – disclosure of income by the assessee amounts to concealment of income – The plea of the assessee “he assumed that the default in not declaring the income was not willful - All the amounts received by him from the hospital were included in the certificate issued by the hospital - He had come to know about the moneys not included in the certificate only through the notice issued to him by the Department under section 148” was not convincing - Adopting 'Doctrine of continuity' and concurrence, the penalty in the assessee's case is liable to be confirmed only in the first assessment year - Decided against assessee for the first assessment year. Issues involved:1. Penalty imposed under section 271(1)(c) of the Income-tax Act, 1961.2. Concealment of income and furnishing inaccurate particulars.3. Continuity of conduct across multiple assessment years.Analysis:Issue 1: Penalty imposed under section 271(1)(c) of the Income-tax Act, 1961The judgment deals with a batch of 12 appeals challenging penalties imposed by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961. The appeals were filed by two different assessees. The issue at hand was whether the penalties imposed were justified based on the circumstances of each case.Issue 2: Concealment of income and furnishing inaccurate particularsThe case involved an anesthetist working in a hospital who had not accounted for a significant amount of money received during the assessment year. The Department discovered this non-disclosure during investigations. The assessee argued that the non-disclosure was unintentional, as he believed the amounts were included in the hospital's certificate. However, the Assessing Officer and the Commissioner of Income-tax (Appeals) found the explanation insufficient and imposed penalties under section 271(1)(c) for concealment and furnishing inaccurate particulars.Issue 3: Continuity of conduct across multiple assessment yearsThe Tribunal observed that the assessee's conduct of concealing income and furnishing inaccurate particulars was consistent across multiple assessment years. However, the Tribunal applied the 'Doctrine of continuity' and held that the penalty should be confirmed only for the first assessment year, granting relief for the subsequent years. The Tribunal emphasized that the penalty proceedings were separate from the assessment proceedings, and the assessee's conduct during assessments was crucial in determining the imposition of penalties.In conclusion, the Tribunal upheld the penalties imposed for the first assessment year while granting relief for the subsequent years based on the continuity of conduct. The judgment highlights the importance of transparency and accuracy in income disclosure to avoid penalties under section 271(1)(c) of the Income-tax Act, 1961.