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2025 Supreme(Online)(Pat) 1311
PATNA HIGH COURT
MR. RAJEEV RANJAN PRASAD, MR. ASHOK KUMAR PANDEY, JJ
Goberdhandhanri Infratech Private Limited – Appellant
Versus
The Union of India – Respondent
Civil Writ Jurisdiction Case No.1290 of 2025
For the Appellants/Petitioners:Mr. Sanjeev Kumar, Advocate, Mr. Pravashankar Mishra, Advocate
For the Respondents:Ms. Archana Sinha, Senior SC, Ms. Richa Rajiv Singh, Advocate
The imposition of penalties for non-filing of income tax returns requires clear evidence of concealment, which was absent, thus the penalty was not warranted.
Headnote:(A) Income Tax Act, 1961 - Section 271(1)(c) - Penalty for concealment of income - Penalty of Rs.13,92,221/- imposed on the petitioner company for assessment year 2015-16 - The court found that the petitioner filed ITR after a notice under Section 148, but no concealment was established as taxes were duly paid - The Assessing Officer failed to consider the statutory provisions relevant to penalty quantification - Writ application granted for setting aside impugned orders. (Paras 24, 34)
(B) Taxation - Proper application of law - The court emphasized that the failure to file an ITR does not inherently constitute concealment, and reiterated that penalties must align with statutory guidelines. (Paras 30-33)
Facts of the case:
The petitioner company, engaged in civil construction, inadvertently failed to upload its ITR for the assessment year 2015-16 despite paying all taxes and submitting financial statements on time. A penalty of Rs.13,92,221/- was imposed for non-filing until a notice under Section 148 was issued.
Findings of Court:
The penalty was deemed improper as there was no concealment, and the petitioner was entitled to a refund. The failure in compliance was recognized as bona fide rather than concealment.
Issues: Whether the Assessing Officer properly levied penalties under Section 271(1)(c) based on the failure to file ITR without evidence of concealment.
Ratio Decidendi: The court ruled that penalties under Section 271(1)(c) require evidence of concealment of income, which was absent in this case. The court stressed that mere failure to file returns absent tax evasion cannot invoke penalties.
Result: Impugned orders set aside and the writ application granted.
| Table of Content |
|---|
| 1. background of the writ application details (Para 2 , 3 , 4) |
| 2. petitioner claims lack of concealment (Para 5 , 6 , 7 , 8 , 9 , 10) |
| 3. respondent states grounds for penalty (Para 12 , 13 , 14) |
| 4. court finds factual admissions (Para 15 , 16 , 17) |
| 5. petitioner challenges assessment process (Para 18 , 19 , 20) |
| 6. clarification on provisions of tax law (Para 21 , 22 , 23) |
| 7. court interpretation of statutory provisions (Para 24 , 25 , 26) |
| 8. court dismisses relevance of cited cases (Para 28 , 29 , 30) |
| 9. assessing officer's errors outlined (Para 31 , 32 , 33) |
| 10. court's final decision to set aside orders (Para 34 , 35) |
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date : 17-06-2025
Heard Mr. Sanjeev Kumar, learned counsel for the petitioner and Ms. Archana Sinha, learned Senior Standing Counsel for the Department of Income Tax.
2. This writ application has been preferred seeking the following reliefs:-
“i) To issue a Writ in nature of Certiorari for quashing of the followings:-
a) Order dated 15.09.2022 passed under Section 271 (1)(c) of Income Tax Act whereby penalty of Rs.13,92,221/- for the assessment year 2015-16 has been imposed upon the petitioner company.
b) Demand Notice under Section 156 of Income Tax Act whereby demand of Rs.13,92,221/- for the assessment year 2015-16 has bee determined to be payable to the petitioner company.
c) Order dated 19.03.2024 passed in Revision Case No. being PCIT, Patna- 1/Revision-264/100000392035/23 whereby the order passed by the Assessing Officer has been affirmed and Revision petition has been dismissed.
ii) To issue a Writ in nature of Mandamus directing the respondents not to take any coercive action against the petitioner during pendency of this writ application.
iii) To any other relief or reliefs to which the petitioner is entitled in the facts and circumstances of the case.”
Brief Facts of the Case
3. The petitioner is a private limited company registered under the provisions of the Companies Act, 1956. It is engaged in civil construction works. The case of the petitioner is that the company was continuously filing its Income Tax Returns (ITRs) since its incorporation. The present case arose on account of a bonafide mistake which took place due to inadvertence and human error in not uploading its ITR for the assessment year 2015-16 even as the audited financial statement along with audit report had been duly furnished and all due taxes were paid in full.
4. The petitioner received a demand notice under Section 156 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) whereby a demand of Rs.13,92,221/- was raised against him for the assessment year 2015-16. A copy of the demand notice is Annexure ‘P/6’ to the writ application. The petitioner preferred a revision petition under Section 264 of the Act against the demand notice, before the Principal Commissioner of Income Tax-1, Patna. The revision petition, however, came to be dismissed vide impugned order dated 19.03.2024 on the following grounds:-
(i) The petitioner company did not file its return of income for assessment year 2015-16 voluntarily in spite of having taxable income.
(ii) Only after the issuance of notice under Section 148 of the Act, the petitioner company filed its return of income showing taxable income at Rs.45,05,567/-.
(iii) The petitioner company did not make compliance during penalty proceedings before Assessing Officer nor it submitted any reply during the revision proceedings. During the revision proceedings, online reply was furnished, but failed to explain as to how the penalty order passed by the Assessing Officer is prejudicial to the petitioner company, and (iv) The impugned order has been passed taking recourse to Explanation ‘3’ to Section 271 (1)(c) of the Act.
Submissions on behalf of the Petitioner
5. Mr. Sanjeev Kumar, learned counsel for the petitioner has assailed the impugned orders dated 15.09.2022 (Annexure ‘P/5’) passed by the Assessing Officer and 19.03.2024
