1983 (1) TMI 124 - AT - Income Tax

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Legitimacy of the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961.
3. Validity of the revised returns filed by the assessee before the detection of concealed income.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:

The revenue's appeal was initially noted to be barred by 17 days. An application for condonation of the delay was filed, citing a change of jurisdiction as the reason for the delay. The tribunal, after hearing the assessee's representative and reviewing the facts, found the delay to be due to a reasonable cause and thus condoned the delay.

2. Legitimacy of the Penalty Imposed Under Section 271(1)(c):

The revenue contended that the Appellate Assistant Commissioner of Income-tax (AAC) erred in deleting the penalty of Rs. 22,000 imposed under Section 271(1)(c) by the Income Tax Officer (ITO). The ITO had initiated proceedings under Section 271(1)(c) for an amount of Rs. 21,614, which was allegedly concealed by the assessee in the original return filed on 26th November 1973. The ITO argued that the revised returns were not filed voluntarily but were a result of the assessee's apprehension of detection by the ITO. The ITO also noted that the revised returns were filed after the issuance of a letter asking for detailed income and investment information, indicating that the revised returns were not voluntary disclosures but rather a response to impending detection.

3. Validity of the Revised Returns Filed by the Assessee Before the Detection of Concealed Income:

The AAC found that the revised returns filed by the assessee were valid and that the income was disclosed before any detection by the ITO. The AAC observed that the assessee disclosed true income in the revised returns before the ITO could detect any concealed income. The AAC also noted that the ITO did not consider the revised returns in the assessment order and acted on the original return. The appellate authorities upheld the validity of the revised returns, indicating that the assessee's intention to disclose full and true particulars of income was proven beyond doubt by the act of submitting revised returns.

The revenue argued that the filing of revised returns itself indicated concealment in the original return and that the AAC erred in cancelling the penalty. They relied on case laws suggesting that deliberate omission in the original return could not be rectified merely by filing a revised return. However, the assessee's counsel contended that the revised returns were filed voluntarily and before any detection by the ITO, emphasizing that there was no material evidence to prove that the ITO had detected any concealed income.

After reviewing the facts and submissions, the tribunal concluded that the revised returns were filed voluntarily and before any detection by the ITO. The tribunal found no evidence that the ITO had detected the concealed income before the filing of the revised returns. Consequently, the tribunal upheld the AAC's order, stating that the penalty imposed by the ITO was not justified.

Conclusion:

The tribunal dismissed the revenue's appeal, sustaining the AAC's order to delete the penalty imposed under Section 271(1)(c). The tribunal concluded that the revised returns were filed voluntarily and before any detection of concealed income by the ITO, thereby invalidating the penalty.