1981 (4) TMI 91 - HC - Income Tax

High Court remits case for penalty reconsideration under Income Tax Act, stresses revised return filing to avoid penalties.

The High Court remitted the case back to the Tribunal for reconsideration of the penalty under section 271(1)(c) of the Income Tax Act, emphasizing the ... Penalty Issues involved: The issue involves the correctness of the decision to levy a penalty for concealment of income or filing inaccurate particulars of income despite the assessee submitting revised returns for assessment years 1968-69 and 1969-70.Summary:The High Court of Gujarat was presented with a question regarding the imposition of a penalty under section 271(1)(c) of the Income Tax Act, 1961. The assessee, a registered partnership firm, had initially filed returns for the assessment years 1968-69 and 1969-70, but later submitted revised returns showing additional income. The Income Tax Officer (ITO) initiated penalty proceedings under section 271(1)(c) due to the initial incorrect income disclosure. The Appellate Authority and the Tribunal upheld the penalty decision. The court noted that the Central Board of Direct Taxes (CBDT) had issued instructions allowing for the filing of revised returns in case of false original returns to avoid penalties. The assessee had filed revised returns based on these instructions, but the ITO, Appellate Authority, and Tribunal did not consider the CBDT's instructions. The court emphasized that the revenue authorities should have taken into account the CBDT's instructions before deciding on the penalty. The court decided not to answer the question directly but remitted the matter back to the Tribunal for a fresh decision on the penalty in light of the CBDT's instructions.In conclusion, the High Court declined to answer the question and sent the case back to the Tribunal for a reconsideration of the penalty under section 271(1)(c) of the Income Tax Act, considering the CBDT's instructions.