Decided on February 07,1992



Chander Singh, Accountant Member - (1.) THIS appeal by the assessee for assessment year 1985-86 has been directed against the levy of penalty of Rs. 8,900 under Section 271(l)(c) of the Income-tax Act, 1961.
(2.) The assessee originally had filed the return of income disclosing an income of Rs. 23,300 which was accepted by the Income-tax Officer under Section 143(1) on 10-9-1985. Subsequent to the completion of the assessment under Section 143(1), the residential as well as business premises of the appellant were subjected to search under Section 132 of the Income-tax Act on 25-9-1985. During the course of the search, the Revenue discovered certain slips which indicated suppression of sales. The quantum of suppressed sales was determined by the ITO for the year under consideration at Rs. 17,561. The Revenue also found that for the year under consideration, the assessee had also suppressed interest receipt to the extent of Rs. 8,285. The ITO, therefore, found that the assessee was guilty of concealment of income to the extent of Rs. 26,000 for the year. The assessee again filed a return of income on 13-1-1987 disclosing the suppressed sales and suppressed interest as its income. The ITO was not satisfied with the revised return and he was of the view that the assessee is guilty of concealing the particulars of income and filing inaccurate particulars. It was explained by the assessee before the ITO (1) that the return filed by the assessee on 13-1-1987 was voluntarily filed before any receipt of notice under Section 148 from the department. (2) that the assessee had made a clean breast of its income without hiding anything and these returns were accepted by the department, (3) that one of the partners of the firm is a man of over 72 years, (4) that the Accountant who looked after the accounts was no more, and (5) that the assessee cooperated with the department. The assessee, therefore, requested the ITO to drop the penalty proceedings. The ITO, however, for the reasons .recorded by him in his order under Section 271(l)(c), levied a penalty of Rs. 8,900. The assessee was also not successful before the first appellate authority.
(3.) BEFORE us, Sri M.J. Swamy, learned counsel for the appellant, pointed out that the return filed by the assessee on 13-1-1987 was under the provisions of the Amnesty Scheme. As per the provisions of the said Scheme, the taxpayers were encouraged by the Government to come forward to declare their concealed income or wealth. If the disclosure of concealed Income or wealth was found to be full and true, no penalty for concealment under Section 271(l)(c) of the Income-tax Act or Section 18(l)(c) of the Wealth-tax Act was leviable. The assessee, therefore, took advantage of the Amnesty Scheme, and voluntarily filed the return of Income disclosing the alleged concealed Income of Rs. 26,000. Since the return was filed under the Amnesty Scheme, the Revenue was not Justified in levying the penalty.;

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