2025 (6) TMI 1773

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....- a) Order dated 15.09.2022 passed under Section 271(1)(c) of Income Tax Act whereby penalty of Rs.13,92,221/- for the assessment year 2015-16 has been imposed upon the petitioner company. b) Demand Notice under Section 156 of Income Tax Act whereby demand of Rs.13,92,221/- for the assessment year 2015-16 has bee determined to be payable to the petitioner company. c) Order dated 19.03.2024 passed in Revision Case No. being PCIT, Patna- 1/Revision-264/100000392035/23 whereby the order passed by the Assessing Officer has been affirmed and Revision petition has been dismissed. ii) To issue a Writ in nature of Mandamus directing the respondents not to take any coercive action against the petitioner during pendency of this writ application. iii) To any other relief or reliefs to which the petitioner is entitled in the facts and circumstances of the case." Brief Facts of the Case 3. The petitioner is a private limited company registered under the provisions of the Companies Act, 1956. It is engaged in civil construction works. The case of the petitioner is that the company was continuously filing its Income Tax Returns (ITRs) since its i....

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....itioner company that it missed to upload the ITR. 6. It is submitted that the petitioner company filed its ITR under Section 148 immediately after the company got the opportunity. The returned income was exactly as per the financial statement uploaded along with the tax audit report. The assessment was completed on returned income and no addition was made as no concealment was ascertained. During the assessment proceedings, it was established that the petitioner company had already discharged the tax liability during the financial year itself and there was a 'Nil' demand on assessment. 7. Learned counsel submits that the Assessing Officer has levied penalty in terms of Explanation 3 to Section 271(1)(c), however, he failed to apply the provision of clause (c) of Explanation 4 to Section 271(1)(c). It is submitted that this clause deals with quantification of tax sought to be evaded and resultant penalty where penalty is proposed to be levied in terms of Explanation 3 to Section 271(1)(c). Even the calculation made by the Assessing Officer has been sought to be challenged on the ground that the Assessing Officer has not provided any credit for prepaid taxes as specified in cla....

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....ng Counsel, however, submits that this case would be falling under Section 271(1)(c) of the Act and the Assessing Officer has rightly imposed a penalty of Rs. 13,92,221/- i.e. 100% of the tax sought to be evaded, under Section 271(1)(c) of the Act. Drawing the attention of this Court towards the said provision of the Act, learned Senior Standing Counsel has submitted that because the petitioner did not file its ITR within the prescribed period, the non-filing of ITR alone is sufficient to attract Section 271(1)(c) of the Act. 14. Reliance has also been placed on the judgment of the Hon'ble Allahabad High Court in case of Addl. Commissioner of Income-tax v. Mewa Lal Sankatha Prasad reported in (1979) 116 ITR 356 and on a judgment of the Income Tax Tribunal, Visakhapatnam Bench in case of Meka Ranganayakamma v. Income Tax Officer reported in [2024] 159 taxmann.com 1621 to submit that where the assessee had failed to file return of income under Section 139 (1) and then filing the same only in response to notice under Section 148 would amount to concealment of income. The counter affidavit does not controvert the statements made in paragraph '16 (iii)' of the writ application. Co....

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....enalty of Rs.13,92,221/- i.e. 100% of the tax sought to be evaded u/s 271(1)(c) of the Income Tax Act, 1961." 18. It is evident that the Assessing Officer is not taking into consideration the taxes already paid by the petitioner. The concluding paragraph gives an impression as if the petitioner evaded the payment of tax amounting to Rs.13,92,221/- which is not a correct position. The column 'D' in the tabular form gives a wrong impression. 19. It appears that when the petitioner company preferred revision before the Principal Commissioner of Income Tax-1, Patna, a plea was taken that it is not a case of concealment and the learned Assessing Officer had ignored the provision of clause (c) of Explanation '4' to Section 271(1)(c) of the Act that deals with quantification of penalty where penalty is leviable under Explanation '3' to Section 271(1)(c). As regards the order passed by the Revisional Authority, the petitioner has assailed the assertion on the revisional order that "no reply was received from the end of the assessee". The petitioner has asserted that the company through it's Chartered Accountant had appeared physically or online on each and every date which can be ver....

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....o concealment of income made by the assessee in terms of the provision laid down in clause (c) of the Explanation '4' of Section 271 of the Act. 23. Section 271(1)(c) of the Act and its Explanation '3' are quoted hereunder:- "271(1)(c) has concealed the particulars of his income or Omitted by Act 5 of 1964, S.40 (w.r.e.f. 1-4-1964) [* * *] furnished inaccurate particulars of [ Substituted by Act 18 of 2005, S.58, for certain words (w.e.f. 1-4-2006).] [such income, or] Substituted by Act 3 of 1989, S.50, for Explanation 3 (w.e.f. 1-4-1989) [Explanation 3. -Where any person Certain words omitted by Act 20 of 2002, S.101 (w.e.f 1-4-2003) [* * *] fails, without reasonable cause, to furnish within the period specified in sub-section (1) of section 153 a return of his income which he is required to furnish under section 139 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of sub-section (1) of section 142 or section 148 and the Assessing Officer or the Certain words omitted by Act 21 of 1998, S.65 (w.e.f 1-10-1998) [* * *] Commissioner (....

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....satisfaction to be reached by the Assessing Officer or the Joint Commission (Appeals) or the Commissioner (Appeals) that in respect of such assessment year, such person has taxable income and if he has not filed his return, then he will be deemed to have concealed his particulars of income in respect of such assessment year. In the present case, no such satisfaction has been recorded by the Assessing Officer in the peculiar facts of this case where admittedly, the petitioner had uploaded the financial statements and the tax audit report and had paid all the taxes. 29. According to this Court, the provisions of law as discussed above have been incorporated in the statute book to catch hold of a dishonest person who fails to file his return and conceals his particulars of income in order to evade taxes. In the present case, the facts are glaring and showing on the face of it with an admission on the part of the respondents that it was not a case of concealment of income by the assessee. In fact, the petitioner has been found entitled to refund. 30. So far as the two judgments cited by Ms. Archana Sinha, learned Senior Standing Counsel for the Department are concerned, in the co....