1993 (3) TMI 42 - HC - Income Tax

Summary

Issues:
- Assessment of penalty under section 271(1)(c) of the Income-tax Act, 1961
- Validity of the revised return filed by the assessee
- Burden of proof on the assessee regarding income discrepancy
- Justification of penalty confirmed by the Tribunal

Analysis:
The case involved the assessment of penalty under section 271(1)(c) of the Income-tax Act, 1961, based on discrepancies in the income disclosed by the assessee. The assessee filed a revised return disclosing higher income after a raid by the Income-tax Department at his father's premises. The Income-tax Officer made an addition to the income due to unverifiable brokerage amounts and initiated penalty proceedings under section 271(1)(c) for furnishing inaccurate particulars of income.

The Tribunal refused to refer certain questions to the court, including the voluntariness of the revised return and the burden of proof on the Revenue. The only question referred to the court was whether the penalty levied under section 271(1)(c) could be sustained. The Tribunal had found that the revised return was not voluntary and that there was no scope for a mistake, indicating deliberate concealment by the assessee.

The court noted that the difference between the returned and assessed income was significant, requiring the assessee to prove the absence of fraud or neglect. The assessee's explanation of a mistake in omitting brokerage receipts was deemed insufficient, especially considering the lack of explanation on how the mistake occurred. The court found that the Tribunal's decision to confirm the penalty was reasonable, given the circumstances of the case, including the raid and the assessee's failure to discharge the burden of proof as per the Explanation to section 271(1)(c).

Ultimately, the court upheld the penalty, ruling in favor of the Revenue. The decision was based on the findings of fact by the Tribunal, which were deemed conclusive, and the failure of the assessee to provide a satisfactory explanation for the income discrepancies. The court disposed of the reference accordingly, without awarding costs.