Case Note & Summary
The appeal was filed by the Revenue under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal (ITAT) dated 12.11.2008. The dispute pertained to a block assessment period from 1.4.1991 to 29.5.2001. The assessee, M/s H.M.Exports, had claimed a sum of Rs.88,00,505/- as income earned from export of exhibition rights of cinematographic films. The Revenue contended that this amount constituted undisclosed income under Section 158B(b) of the Act because the regular return for the assessment year 1994-95, in which the amount was declared, was filed belatedly. The Tribunal, however, held that the amount did not constitute undisclosed income as it was declared in the regular return, albeit belatedly. The High Court admitted the appeal on the first substantial question of law regarding whether the Tribunal's finding was perverse and arbitrary. The court, following its reasoning in a companion case (ITA No.191/2009), dismissed the appeal, holding that income declared in a regular return, even if filed belatedly, does not fall within the definition of undisclosed income under Section 158B(b). The court found no perversity or arbitrariness in the Tribunal's order and upheld the same. The second question regarding rectification under Section 254(2) was also answered against the Revenue as the Tribunal correctly found no mistake apparent from the record.
Headnote
A) Income Tax - Block Assessment - Undisclosed Income - Section 158B(b) of the Income Tax Act, 1961 - The issue was whether a sum of Rs.88,00,505/- claimed as export of exhibition rights of cinematographic films constituted undisclosed income under Section 158B(b) when the amount was declared in a belated regular return for AY 1994-95. The court held that income declared in a regular return, even if filed belatedly, does not fall within the definition of undisclosed income under Section 158B(b) as it was not omitted from the regular return. The Tribunal's finding was not perverse or arbitrary. (Paras 1-3) B) Income Tax - Rectification of Mistake - Section 254(2) of the Income Tax Act, 1961 - The Tribunal held that there was no mistake apparent from the record in its earlier order to warrant rectification under Section 254(2). The court upheld this finding, noting that the issue of belated return was already considered and the Tribunal's view was plausible. (Para 2)
Issue of Consideration
Whether the sum of Rs.88,00,505/- claimed by the assessee as earned from export of exhibition rights of cinematographic films would constitute undisclosed income under Section 158B(b) of the Income Tax Act, 1961 when the said amount was declared in the regular return of income for the assessment year 1994-95 filed belatedly.
Final Decision
Appeal dismissed. The order of the Tribunal dated 12.11.2008 is upheld. The substantial question of law is answered against the Revenue.
Law Points
- Undisclosed income under Section 158B(b) of the Income Tax Act
- 1961 does not include income declared in a regular return of income even if filed belatedly
- Mistake under Section 254(2) of the Income Tax Act
- 1961 must be apparent from the record
