Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1971-72 - Assessee debited twice a sum from its income-tax return but in revised return filed by it, it added that sum -Whether imposition of penalty was justified when filing of revised return, was voluntary and when Tribunal had accepted assessee's explanation for earlier year and later year - Held, no FACTS The assessee was engaged in collecting, lifting and transporting salt from C on behalf of company T. The assessee had originally filed return of income for the assessment year 1971-72 declaring a total income of Rs. 1,01,917. Thereafter, it filed a revised return declaring income of Rs. 1,58,917 the difference being of Rs. 57,000 which was debited twice firstly by debiting the value of 14,250tonnes of salt washed a way due to rain and again by showing less closing stock on account of reduction at 10 per cent (14,250 tonnes) on account of rain-wash. The IAC found that the revised return was prompted by the investigation which was started by the ITO regarding the rain-wash allowance. He found that the assessee had furnished inaccurate particulars of income even in the single claim of 10 per cent of reduction due to rain-wash as the actual loss due to rain-wash was much less as reflected in the books of account of C. The IAC found that since the Explanation to section 271(1)(c) was attracted it was for the assessee to establish that the difference between the income finally determined and the income shown in the return submitted by the assessee after adjustments for expenses, etc., disallowed was not due to concealment of income. He, therefore, imposed penalty but, on appeal, the Tribunal reduced it. On reference : HELD The ITO had ultimately accepted the claim of the assessee in respect of the 10 per cent deduction due to rain-wash. The Tribunal did not notice that the IAC was oblivious of the fact that the ITO had ultimately upheld the claim of the assessee for 10 per cent deduction due to rain-wash. The Tribunal also did not notice that the approach of the IAC that it was for the assessee to establish that there was no concealment of income was not…

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