DAYABHAI GIRDHARBHAI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference raises a very short question. It is as follows:

(2.) NOW, Mr. Pandit on behalf of the assessee, in the first instance, has argued that every assessee has a right to file a revised return under Section 22 Sub-section (3); and if that return is in effect accepted, the earlier return must be treated as cancelled for all purposes and no penalty can be imposed in respect of any concealment in the earlier return. Now, it is perfectly true that every assessee has the right under Section 22 Sub-section (3) to submit a revised return if he discovers any omission or wrong statement in his original return before the assessment is made. But the omission or wrong statement may be accidental or deliberate. Where it is accidental, no result may ensue by reason of the omission; hut where the omission is deliberate, the results of such deliberate omission cannot be got rid of merely by filing a revised return. If the omission is deliberate, then in respect of the original return the provisions of section 28 (l) (c) apply, because that sub-section provides that the Income-tax Officer, if he is satisfied that the assessee "has concealed the particulars of his income or deliberately furnished inaccurate particulars of his income", he may be subjected to a penalty. Therefore, where the concealment is not an accidental omission but is a deliberate concealment, the penalty is attracted notwithstanding the fact that the return has been subsequently corrected. The question as to whether the omission is deliberate or bona fide is a question for the Income-tax authorities to determine, it being a pure question of fact; and it cannot arise for determination by us unless there was a reference on a question as to whether there was any evidence on which the income-tax authorities could have come to such a conclusion. No such question has been referred to us, and indeed, the question referred to us in terms states that there was deliberate concealment, which was the finding of the Income-tax Officer confirmed by the A. A. C. and the Tribunal.

(3.) THEN Mr. Pandit argues that if a penalty is attracted notwithstanding the fact that a revised return is filed, then it is futile for the assessee to file a revised return. It may be that it is futile for a dishonest assessee to file a revised return; but ordinarily even a dishonest assessee may benefit by filing a revised return, to the extent to which the assessee has benefited in this case, namely, that the taxing authorities may not impose the maximum penalty on him having regard to the fact that he himself corrected his own statement. In any event, the question as to whether a penalty can be imposed in respect of a concealment in the original return cannot be determined by considering whether there is any inducement for an assessee to file a revised return. Every assessee is expected to file a correct return; and if he does not do so, it is his duty to correct it the moment he discovers any omission, whether there is an inducement to correct it or not.