2004 (1) TMI 21 - HC - Income Tax

Penalty under section 271(1)(c) - Commissioner of Income-tax (Appeals) found that penalty was not exigible because the assessee had filed the preliminary details along with the return and letter dated January 25 1996. In the given circumstances it was held that it cannot be said that the assessee has filed inaccurate particulars or concealed any income chargeable to tax. Thus the penalty was deleted. Tribunal was justified in affirming the decision of Commissioner no question of law arise appeal of revenue dismissed

Summary

Issues:
- Appeal under section 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal.
- Claim of loss on trading in shares disallowed due to deeming provisions of the Explanation to section 73.
- Imposition of penalty under section 271(1)(c) for the disallowed loss.
- Commissioner of Income-tax (Appeals) decision to delete the penalty.
- Tribunal's dismissal of Revenue's appeal based on a Supreme Court judgment.

Analysis:
The judgment pertains to an appeal under section 260A of the Income-tax Act, 1961, filed by the Revenue against the order of the Income-tax Appellate Tribunal for the assessment year 1994-95. The issue at hand was the disallowance of a loss claimed by the assessee on trading in shares due to the applicability of the Explanation to section 73. This disallowance led to the imposition of a penalty under section 271(1)(c) on the assessee.

Upon receiving a show-cause notice for the penalty, the assessee contended that the loss was genuine but disallowed due to the deeming provisions, claiming lack of awareness. The Assessing Officer imposed a penalty, which was later deleted by the Commissioner of Income-tax (Appeals). The Commissioner found that the assessee had filed preliminary details along with the return and a letter, indicating no concealment of income chargeable to tax.

The Revenue, dissatisfied with the Commissioner's decision, appealed to the Tribunal. However, the Tribunal dismissed the appeal, citing a Supreme Court judgment and finding no merit in the Revenue's case. The High Court, upon review, concurred with the Tribunal's findings, stating that there was no substantial question of law involved in the appeal. Consequently, the appeal was dismissed for lacking merit and substance.