1993 (12) TMI 100 - AT - Income Tax

Tribunal cancels penalty for income tax non-disclosure, emphasizes need for proof of concealment

The Tribunal canceled the penalty imposed under section 271(1)(c) of the Income Tax Act, finding no deliberate concealment as the disclosed income was ... Penalty, For Concealment Of Income Issues involved: Appeal against penalty u/s 271(1)(c) of the I.T. Act, 1961 for alleged concealment of income.Summary:The assessee, engaged in cloth business, filed a return of income including a sum of Rs. 61,000 offered as taxable income after a survey revealed discrepancies. The Assessing Officer initiated penalty proceedings u/s 271(1)(c) for intentional concealment. The CIT(A) upheld the penalty, citing Explanation 5 to section 271(1)(c) as applicable to the case. The AR argued that no concealment occurred as the amount was voluntarily disclosed to avoid litigation. The Tribunal found that Explanation 5 does not apply to survey cases u/s 133A and disagreed with the finding of concealment. The return was accepted with minor variations, and no evidence of deliberate concealment was found. The penalty was canceled, and the appeal was allowed.In the case, the Assessing Officer imposed a penalty u/s 271(1)(c) based on the voluntary disclosure of income by the assessee after a survey. The CIT(A) upheld the penalty, invoking Explanation 5 to section 271(1)(c) and concluding concealment. However, the Tribunal clarified that Explanation 5 does not apply to survey cases u/s 133A and found no evidence of deliberate concealment as the disclosed income was accepted without omission. The Tribunal emphasized the need for positive proof of concealment and canceled the penalty, allowing the appeal.