November 2008
Penalty : Concealment of income : S. 271(1)(c) : Cash compensatory support not included in original return, but in revised return : No concealment of income : Penalty could not be imposed.
By K. B. Bhujle, Advocate
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13 Penalty : Concealment of income : S.
271(1)(c) of Income-tax Act, 1961 : Cash compensatory support not included in
original return : Amount included in revised return: No concealment of income:
Penalty could not be imposed.
[CIT v. Mentha and Allied Products P. Ltd., 304 ITR
214 (All.)]
In the original return of income the assessee had not
included the cash compensatory support amounting to Rs.65,61,640. Subsequently,
the Finance Act, 1990, brought about an amendment, with retrospective effect,
that the cash assistance was taxable. In view of this amendment, the assessee
voluntarily filed a revised return and included the cash compensatory support
therein. The Assessing Officer levied penalty u/s.271(1)(c) of the Income-tax
Act, 1961. The Tribunal cancelled the penalty. In appeal before the High Court,
the Revenue contended that the Tribunal had cancelled the penalty wrongly on the
basis that the assessee has voluntarily filed the revised return when in fact
the revised return was filed after issuance of notice u/s.142(1) on 30-1-1991.
The Allahabad High Court dismissed the appeal filed by the
Revenue and upheld the decision of the Tribunal.
