1982 (1) TMI 6 - HC - Income Tax

Court rules no concealment of income under section 271(1)(c) - Penalty unjustified

The High Court held that the Tribunal erred in finding that the assessee concealed income under section 271(1)(c) of the Act. The Court emphasized that ... Penalty Issues:1. Justification of holding that the assessee concealed income under section 271(1)(c) of the Act.Detailed Analysis:The case involved a reference made by the Income-tax Appellate Tribunal regarding the justification of holding that the assessee concealed income. The relevant assessment year was 1972-73, where the assessee derived share income from three firms and income from a house property. The initial return filed by the assessee declared income from two firms but omitted the share income from one firm. The Income Tax Officer (ITO) then informed the assessee about the omission and imposed a penalty for non-disclosure of the share income from that firm.The assessee explained that the omission was due to oversight as two different counsels were handling the cases of the two firms. A revised return was filed later including the omitted share income. The penalty imposed by the ITO was reduced on appeal but was still upheld by the Tribunal. The Tribunal's decision was based on the non-disclosure of income from one firm, despite the subsequent filing of a revised return including the omitted income.The High Court analyzed the facts and circumstances of the case and found that the Tribunal erred in concluding that there was an intention to conceal income. The Court emphasized that the omitted income was disclosed within two days in a revised return, indicating no intention to conceal. The Court noted that the penalty was specifically for the non-disclosure of income from one firm and not for other omissions. Therefore, the Court held that the Tribunal's finding of concealment of income was unjustified and perverse.In conclusion, the High Court ruled that the Appellate Tribunal was not justified in holding that the assessee concealed income and confirmed the penalty under section 271(1)(c) of the Act. The Court also ordered no costs for the reference.