Delhi High Court : - Commissioner of Income Tax Vs SAS Pharmaceuticals : (2011) 199 Taxmann 255 (Magazine)
Income Tax Act Section 271(1) (c) says that if any person conceal his income than as per this section penalty can be imposed one time of the amount of Income Tax to three time of the amount of Income Tax. In this case, there was an survey on 06.01.2003 in the place of businessman. During survey it was found that there were defecencies in the Cash and Stock of the businessman. Due to this businessman surrender some income and while submitting his regular income, he includes separately income of surrendered amount and pays complete Income Tax. All this has been done by a businessman to avoid litigation and to by peace of mind
Assessing Officer impose penalty on businessman with the saying that if there was no survey, businessman conceal the surrendered amount and do not pay income tax on such amount. He has paid only Income Tax on surrendered amount only after survey. Businessman submit appeal against the penalty amount. In the end, Hon'ble High Court gives his decision that to impose penalty concealment will be watched on the basic of Point of View of Income Tax Return. An amount included in Income Tax Return can not be treated as concealed income. In normal case, Income Tax Departments decide that assessee has concealed any income or not on the basis of Tax Assessment Proceding. Because during Tax Assessment Procedure, there was no extra income in this case, therefore there penalty can not be imposed on assessee.