Sir, my friend get an family income certificate from Tehsildar office but he did not include his unmarried brother's income in the application which was given to Tehsildar. Now one of his neighbours complaint it to Tehsildar and Tehsildar cancelled it with wrongly issued remarks.
Can he be prosecuted by the Tehsildar for concealment of facts ?
It is to be noted that Tehsildar has the authority to issue income certificates and also invalidate the same but the power to cancel or revoke certificates must typically follow due procedure which includes initiation of verification, issuing of show cause notice and opportunity to explain and provide evidence.
In the present case, accused is said to have wrongfully concealed the facts. To this claim made by neighbour, Tehsildar needs to investigate and verify the allegations and upon proving issue a show cause notice and give an opportunity to the accused to justify himself thereby upholding the principle of audi altrem partem. If this due process is not relied upon then accused can cited the case of Ruby Singh v. Tahsildar (2014) where the Allahabad High Court set aside an order cancelling the petitioner's income certificate, ruling that the order was invalid because it was passed in blatant disregard of natural justice. The court found that the petitioner was not provided with a copy of the report relied upon by the authorities, nor given an opportunity to contest the allegations.
From the perspective of punishment for concealment of facts, section 271 (1) (c) of Income Tax act 1961 clearly states the concealment of particulars of income or fringe benefits or furnishing of inaccurate particulars of income or fringe benefits and levies penalty of minimum 100% as a fine and maximum 300% of tax sought to be evaded in addition to tax payable.
Furthermore, it is to be noted that the AO shall be clear by way of his assessment order that whether the penalty has been levied for concealment of income or for furnishing of inaccurate details. Failing which the assessment order shall be considered as an Order bad in law. The basis of satisfaction cannot be altered subsequently IAC. CIT-v-Kejriwal Iron Stores 168 ITR 715 (Raj).
Likewise the AO has to be very clear about which category the order falls under, either under the concealment of income or furnishing of incorrect details; Absence of the same it will be considered as a bad in the eyes of law and on the other hand the basis of satisfaction cannot be altered subsequently.-CIT-v- Lakhdhir lalji 85 ITR 77(Guj)
Hence from the above we can conclude that if the procedural principles are violated, accused may challenge the cancellation in the court. However, if concealment is proven after due process, legal consequences including penalties may follow.
