Commissioner of Income Tax-V V. M/s.Arpitha Constructions

ITTA/144/2013

AI Insights

The case involves the Commissioner of Income Tax-V, Hyderabad as the appellant and M/s Arpitha Constructions, Secunderabad as the respondent. The appeal was against the judgment and order of the learned Tribunal which set aside the penalty proceedings initiated under Section 271(1)(c) of the Income Tax Act for the assessment year 2001-2002. The main legal questions pertained to whether the penalty for concealment of income was sustainable when the Tribunal found no concealment or specific omission by the assessee. The High Court, after reviewing the Tribunal's findings and the materials on record, concurred with the Tribunal's decision and dismissed the appeal, stating that the pre-conditions for initiating penalty proceedings were not satisfied as there was no concealment found.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 719120 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 28-06-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Concealment of income; Penalty; Revised Returns; Survey operations
• Section: 271(1)(c)

Judgement Text

"HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON’BLE Ms. JUSTICE G.ROHINI I.T.T.A.No.144 of 2013 Date: 28.06.2013 Between: Commissioner of Income Tax-V, Hyderabad. .....Appellant AND M/s Arpitha Constructions, Secunderabad. ...Respondent HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON’BLE Ms. JUSTICE G.ROHINI I.T.T.A.No.144 of 2013 JUDGMENT: (per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta ) This appeal is sought to be admitted on the following suggested questions of law: i. In the facts and circumstances of the case, where the impounded material found during survey operations relating to suppression of receipts, lead to filing of revised returns and the respondent assessee concealed the said additional income in the original return filed by it, whether the order of penalty under Section 271 (1) ( c ) of Income Tax Act is not sustainable in law as erroneously held by the Hon’ble Tribunal? ii. In the facts and in the circumstances of the case, when the respondent assessee concealed its income particulars in the original return of income, whether the order of penalty issued by the Assessing Officer under Section 271 (1) ( c ) of Income Tax Act is not valid in law as erroneously held by the Hon’ble Tribunal? This appeal is preferred against the judgment and order of the learned Tribunal dated 03.03.2010 in relation to the assessment year 2001-2002. We have heard the learned Counsel for the appellant and gone through the impugned judgment and order. The learned Tribunal by the impugned judgment and order set aside the proceedings initiated under Section 271 (1) ( c ) of the Income Tax Act. The learned Tribunal after analyzing the fact came to the conclusion that there was no concealment on the part of the respondent/assessee. The relevant fact-findings of the learned Tribunal read as under: “After examining the material available and the books of accounts filed by the assessee, the assessing officer accepted the income returns in the revised returns with minor addition towards some interest income and initiated penalty proceedings under Section 271 (1) ( c ) of the Act. The assessing officer did not find out any specific omission or concealment either at the time of survey or at the time of assessment proceedings.” Therefore, the pre-conditions for initiating proceedings under Section 271 (1) ( c ) of the Act are not satisfied. Section 271 (1) ( c ) of the Act is extracted as under: “271. “Failure to furnish returns, comply with notices, concealment of income etc., (1) If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person--- ( c ) has concealed the particulars of his income or furnished inaccurate particulars of such income or he may direct that such person shall pay by way of penalty,- -- The aforesaid Section clearly shows that penalty proceedings can be initiated on various grounds. In this case, during the course of survey proceedings or subsequent to the proceedings, the assessing officer did not find out any specific concealment. When on fact it was found that there was no concealment on the part of the respondent/assessee, initiation of proceedings of penalty under the aforesaid Section is without jurisdiction. The learned Tribunal has correctly held the legal position. Therefore, we affirm the order of the learned Tribunal. Accordingly, the appeal is dismissed. No order as to costs. Miscellaneous petitions, if any, pending shall also stand closed. ___________________ K.J. SENGUPTA, CJ _______________ G.ROHINI, J 28.6.2013 Gsn. "