Bombay H.C : The Hon’ble Tribunal has erred in deleting the penalty observing that as the assessee had not filed return of income on the ground that assessee had concealed or furnished inaccurate particulars of income

High Court Of Bombay

CIT vs. Smt. Lata Shantilal Shah

Section 271(1)(c), Expln. 3

Asst. Year 1997-98

F.I. Rebello & R.S. Mohite, JJ.

IT Appeal No. 1261 of 2008

20th January, 2009

Counsel Appeared :

K.R. Choudhari, for the Appellant : K. Gopal with Jitendra Singh, for the Respondent

JUDGMENT

by the court :

The Revenue is in appeal against the order of Tribunal and they have raised the following question :

“Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal has erred in deleting the penalty observing that as the assessee had not filed return of income on the ground that assessee had concealed or furnished inaccurate particulars of income ?”

2. In the instant case, what is relevant are the provisions of s. 271(1)(c) which reads as under : “(1) If the AO or the CIT(A) or the CIT in the course of any proceedings under this Act, is satisfied that any person— (a) ……. (b)……. (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or, (d)

…………. he may direct that such person shall pay by way of penalty,—”

3. Explanation 3 to s. 271 reads as under :

“Where any person who has not previously been assessed under this Act, fails, without reasonable cause, to furnish within the period specified in sub-s. (1) of s. 153 a return of his income which he is required to furnish under s. 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 cl. (i)……………”

4. By Finance Act, 2002 w.e.f. 1st April, 2003, the words “who has not previously been assessed under this Act” were omitted.

5. We are concerned with the asst. yr. 1997-98. In other words, what we have to see is the provision as it then stood previous to its amendment. There is categorical finding that the assessee had earlier filed returns. Penalty is sought to be imposed on the ground of failure to file returns. The wording in s. 271(1)(c) are in case where returns have not been filed or furnished inaccurate particulars of income. Clearly the assessee’s case would not fall under s. 271(1)(c).

6. The Tribunal by its impugned order has noted that the said provision would not be attracted as in the facts of this case, the assessee in fact had earlier filed returns.

7. On behalf of the Revenue the learned counsel sought to import Expln. 1 to s. 271. In our opinion, this was not an issue either before the AO or CIT(A) or before the Tribunal. The question must arise from the order of the Tribunal. In our opinion, therefore, the question as raised would not arise. Consequently appeal dismissed.

[Citation : 323 ITR 297]