INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Revised return filed pursuant to survey disclosing higher income - Validity of penalty order - Revised return filed, whether to be treated as non-est

Pursuant to a survey assessee had filed revised return declaring higher income than shown in original return of income. AO rejected the revised return holding that requirements of section 139(5) were not fulfilled and imposed penalty under section 271(1)(c). Held: It was not the case of assessee that at the time of filing original return, it was not aware about such gross concealment of income. In fact, assessee had admitted bogus entries in the accounts and thereby concealing sizeable income. Further, assessee's contention that directors were illiterate and they did not understand intricacies of law as well as of account, was unacceptable. Assessee had high turnover amounting to Crores of rupees and as its directors were dealing with big corporate houses, they had vast experience in line of business. Since claiming huge expenditure on account of bogus companies could not be termed to be a mere mistake, therefore penalty order did not want any interference.

REFERRED : CIT v. Manu Engg. Works (1980) 122 ITR 306 (Guj.) : 1980 TaxPub(DT) 0483 (Guj-HC) CIT v. Pearey Lal & Sons (EP) Ltd. (2009) 308 ITR 438 (Punj. & Har.) : 2009 TaxPub(DT) 0892 (P&H-HC)

FAVOUR : Against the assessee

A.Y. :

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