revised return filed under Section 139(5) of the Act, was valid return of income filed by the Respondent on its own and not on the basis of any investigation/ discovery done by the department of inaccurate particulars in the original return of income. Thus, there is no basis for invoking Section 271(1) (c) of the Act.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
This Appeal under Section 260A of the Income Tax Act, 1961 (the Act), challenges the order dated 22nd January, 2014 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order dated 22nd January, 2014 is in respect of Assessment Year 2005-06.
2. Revenue urges the following question of law, for our consideration:
“(a) Whether on the facts and in the circumstance of the case and in law, the Tribunal is right in holding that penalty under Sections 271(1) (c) cannot be levied on income declared in the revised return of income filed u/s. 139(5) of the I. T. Act, 1961?”
3. The Respondent originally filed its return of income for Assessment Year 2005-06, declaring a loss of Rs.20.64 Crores. On receipt of scrutiny notice under Section 143(2) of the Act, the Respondent filed revised return of income, reducing its income to ‘Nil’. This by adding a sum of Rs.20.64 Crores under Section 14A of the Act.Thereafter, assessment was completed at Nil income, as declared by the Respondent-Assesee in its revised return of income.
4. Thereafter, the present penalty proceedings were initiated by the Assessing Officer on the ground that the revised return by the Respondent-Assesee was not filed voluntarily but only after issuing a scrutiny notice under Section 143(2) of the Act. This on the ground of having filed inaccurate particulars of income and imposed penalty of Rs.7.40 Crores.
5. Being aggrieved, Respondent carried the issue in Appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. By order dated 21st July, 2011, the CIT(A) deleted the penalty. This after having recorded a finding of fact by placing reliance upon the order of the Tribunal dated 27th May, 2011 in quantum proceedings. In the quantum proceedings, the Tribunal has held that there is nothing either in the order of the Assessing Officer or in the order of the CIT(A) to show that the revised return of income was filed only after the detection of the Revenue that the original return contained inaccurate particulars. It further records that the Tribunal in its order dated 27th May, 2011 has recorded the fact that even at the hearing, the departmental representative was unable to show that revised return was filed only after the Assessing Officer had detected inaccurate particulars of income in the original return of income. Thus, the CIT(A) comes to a finding of fact that the filing of the revised income was voluntarily done by the Respondent suo motu and not because of detection by the Revenue.
6. Being aggrieved by the order dated 21st July, 2011 of the CIT(A), deleting the penalty, the Revenue filed an appeal to the Tribunal.The Tribunal by the impugned order has also while coming to finding of fact, reiterates the finding in its earlier order dated 27th May, May, 2011 in quantum proceedings viz: the revised return filed under Section 139(5) of the Act, was valid return of income filed by the Respondent on its own and not on the basis of any investigation/ discovery done by the department of inaccurate particulars in the original return of income. Thus, holding that there is no basis for invoking Section 271(1) (c) of the Act.
7. Mr. Tejveer Singh, learned Counsel for the Revenue states that the revised return was filed only after the scrutiny notice was issued to the Respondent. Therefore, the penalty imposed upon the Respondent is justified. On the other hand, Mr. Parekh reiterates the finding in the orders of CIT(A) and the Tribunal.
8. We find that both the CIT(A) as well as Tribunal have recorded a concurrent finding of fact that revised return of income under Section 139(5) of the Act was filed by the Respondent Assessee on its own and not on account of any detection of inaccurate particulars of income being filed by the Respondent in its original return of income. The finding of fact rendered both by the CIT(A) and the Tribunal that the revised return of income was filed by the Respondent suo motu and not consequent to detection of inaccurate particulars of income by the Assessing Officer, is not shown to be perverse. Admittedly, there is no allegation that the revised return of income filed by the Respondent-Assessee, contains any inaccurate particulars of income.
9. In these circumstance, particularly the finding of fact rendered both by the CIT(A) and the Tribunal, the question as proposed does not give rise to any substantial question of law.
10. Accordingly, Appeal dismissed. No order as to costs.