2003 (3) TMI 18 - HC - Income Tax

Penalty u/s 271(1)(c) - power to levy a penalty - power to levy a penalty under section 271(1)(c) is discretionary - That discretion so vested in the Assessing Officer is subject to appeal and the appellate authority is entitled to look into all the facts of the given case and decide as to whether the penalty was to be sustained or set aside - Commissioner and the Tribunal have examined all the facts and accepted the assessee s claim that his failure to file the return earlier was bona fide Thus, there is no infirmity in Tribunal s order cancelling the penalty levied under section 271(1)(c)

Summary

The High Court of Madras ruled that the penalty under section 271(1)(c) of the Income-tax Act was not leviable for the assessment year 1981-82. The court accepted the assessee's claim of being illiterate and having a bona fide belief that filing returns was not required for foreign monies brought in. The Commissioner and Tribunal decided that the penalty was not sustainable in this case. The decision was in favor of the assessee and against the Revenue.