2002 (8) TMI 13 - HC - Income Tax

Penalty u/s 271(1)(c) - Whether, Tribunal is legally justified in cancelling the penalty u/s 271(1)(c) even after giving clear finding that the assessee made a punishable default u/s 271(1)(c)? Whether Tribunal is justified in cancelling the penalty u/s 271(1)(c) on the ground that under similar circumstances no penalty was levied in the case of a sister concern? - reading of the order of the Tribunal clearly shows that respondent-assessee agreed for the addition and then had withdrawn the appeal to buy peace of mind and to avoid litigation on a clear understanding given by the Revenue that no penalty would be levied -The said finding is a finding of fact. Thus, in our opinion, no referable question arises.

Summary

The High Court of Rajasthan rejected a reference application by the Revenue seeking opinion on the cancellation of a penalty under section 271(1)(c) of the Income-tax Act. The Income-tax Appellate Tribunal canceled the penalty based on assurance from the Department and similar treatment to a sister concern. The court found that no referable question arose as the decision was based on facts. The reference application was rejected.