1990 (8) TMI 227 - AT - Income Tax

Tribunal reinstates penalties for multiple years, dismisses appeal for concealment of income.

The Tribunal held that the CIT(A) was not justified in canceling the penalties for the assessment years 1978-79 to 1981-82. It allowed the departmental ... Carrying On Business, Penalty Proceedings Issues Involved:1. Cancellation of penalties under section 271(1)(c) for assessment years 1978-79 to 1982-83.2. Maintenance of partial penalty for the assessment year 1982-83.Detailed Analysis:Cancellation of Penalties Under Section 271(1)(c) for Assessment Years 1978-79 to 1982-83:The departmental appeals challenged the order of the CIT(A) cancelling the penalties under section 271(1)(c) for the five years in question. The primary contention was that the assessee was carrying on multiple businesses under fictitious names and was not declaring their income, which was detected only during search and seizure proceedings. The revised returns filed by the assessee post-search were argued to be non-voluntary disclosures, as they were made only after incriminating documents were seized. The disproportion between the income assessed for the five years and the additional income disclosed in the revised returns indicated intentional concealment.The Tribunal considered various precedents cited by both parties. It found that the cases cited by the assessee did not apply to the present circumstances, where there was clear admission of concealment in the sworn statement and the petition under section 273A(4). The Tribunal emphasized that the doctrine of estoppel could not be applied as the revised returns were not filed due to any inducement by the Income-tax Officer.The Tribunal found significant support in the cases cited by the Departmental Representative, where revised returns filed post-detection of concealment were held to justify penalties. The Tribunal concluded that the great disproportion between the assessed income and the revised income made it impossible for the assessee to prove that the understatement was unintentional or bona fide. The clandestine carrying on of businesses and non-declaration of their income could not be regarded as bona fide or non-deliberate.The Tribunal noted a misstatement in the CIT(A)'s order regarding the assessee's denial of earning income from businesses in other names, which was contradicted by the petition submitted to the Commissioner.Maintenance of Partial Penalty for the Assessment Year 1982-83:The assessee's appeal challenged the part of the CIT(A)'s order maintaining a penalty of Rs. 6,834 for the assessment year 1982-83. The Tribunal found no basis for interfering with this part of the order, as the assessee had not offered any explanation for the concealment of income from house property. The income declared for the first time in the revised return amounted to an unequivocal admission of concealment.Conclusion:The Tribunal held that the CIT(A) was not justified in cancelling the penalties for the assessment years 1978-79 to 1981-82. It allowed the departmental appeals, quashed the impugned order of the CIT(A), and restored the Income-tax Officer's penalty orders for all five years. The assessee's appeal for the assessment year 1982-83 was dismissed.