Mumbai ITAT: Prior to 2003, if Assessee has filed earlier returns, no penalty for non-filing of return in case returns filed in earlier years

M/s Noble Electric Co. v. Income Tax Officer, on 11^th February, 2011

ITA No. 1655/Mum/2007

Assessment Year: 2001-02

Question/s before the Hon’ble Tribunal: whether as per the explanation (3) to section 271(1)(c) as exists prior to 1.4.2003, the assessee’s non filing of the return of income for the assessment year under consideration would be deemed as concealment of particulars of income.

Relevant facts: The assessee is a partnership firm and did not file return of income u/s 139(1) within a period as prescribed under the Act. The notice under sect ion 142(1) was issued on 26.12.2001 requesting the assessee to file its return of income for the assessment year under consideration. The AO passed the assessment u/s 144(3) of the Act estimating the total income of the assessee at Rs.2,45,63,230/ - being the short term capital gain on sale of immovable property consisting of land and building vide agreement dated 28.9.2000 for a total consideration of Rs.2,60,00,000/ - . The penalty proceedings were initiated under the provisions of sect ion 271(1)(c) of the Act and a penalty of Rs.1,81,55,071/ - was imposed vide order dated 30.3.2006.

Upholding the appeal of the assessee, the Hon’ble Tribunal held that:

Para 7: “In view of the above decision of the Hon. Jurisdictional High Court , we are of the view that the assessee had already filed the returns of income and some of them are definitely within the time prescribed u/s 139(4) then non filing of the return for the assessment year under consideration would not be deemed as concealment of the particulars of the income on the part of the assessee as per explanation (3) as stood prior to 1.4.2003. Accordingly, in the facts and circumstances of the case, and in view of the decision of the hon. Jurisdictional High Court in the case of CIT V/s Lata Shantilal Shah the penalty is liable to be deleted.”

The decision is available here.