1986 (3) TMI 145 - AT - Income Tax

Penalty upheld for intentional omission in first year; deleted for subsequent year due to incorrect HUF status.

The Tribunal upheld the penalty for intentional omission in the first year regarding the assessee's failure to disclose the minor son's income, rejecting ... Penalty, Concealment Of Income Issues:1. Assessment of income of minor son in the hands of the assessee.2. Claiming status as HUF and penalty under section 271(1)(c) of the Income-tax Act, 1961.Analysis:1. The appeals were filed against an order where the assessee, initially a karta of HUF, entered into a partnership transferring the business to the firm. The Income Tax Officer (ITO) added the minor son's share of income to the assessee's total income, leading to penalty proceedings under section 271(1)(c). The assessee contended that his belief regarding the minor son's income was bona fide. The Tribunal, however, noted that the return forms had columns for such disclosures, and the assessee's failure to fill them could not be justified by citing ignorance of the law. Various case laws were discussed, emphasizing the obligation to disclose such income. The Tribunal upheld the penalty for the first year, considering the intentional omission by the assessee.2. In the subsequent year, the assessee did not file a return initially and claimed HUF status upon receiving a notice under section 148. The Tribunal observed that the wrong status claimed did not involve concealment as the return did not require disclosure of the minor son's income. While the conduct of the assessee was criticized, technically, it did not fall under section 271(1)(c) for the subsequent year. The penalty for the second year was deleted based on this analysis.In conclusion, the first appeal was disallowed, upholding the penalty for the intentional omission in the first year. However, the second appeal was allowed, as the incorrect status claimed in the subsequent year did not amount to concealment under section 271(1)(c).