2012 (11) TMI 1103 - HC - Income Tax

Summary

Issues involved: Challenge to penalty under section 271(1)(c) of the Income Tax Act, 1961.

Issue A: The appellant challenged the penalty under section 271(1)(c) imposed by the Assessing Officer and confirmed by the Commissioner(Appeals). The main question was whether the Tribunal was justified in confirming the levy of penalty of Rs. 1,18,611 u/s.271(1)(c) of the Act.

Issue B: The appellant contended that the speculation profit of Rs. 5,54,284/- was not considered in the total income due to a genuine mistake, and should have been eligible for set off against speculation loss of earlier years. The issue was whether this genuine mistake exempted the appellant from penalty under section 271(1)(c) of the Act.

Issue C: The Tribunal questioned the lack of explanation from the appellant regarding the mistake in not adding the amount to income in the Profit and Loss A/c. and in the computation of total income. The issue was whether the appellant adequately explained the circumstances leading to the oversight.

Issue D: The appellant argued that the impugned order by the Tribunal was non-application of mind and perverse, seeking its quashing. The issue was whether the Tribunal's order was justified and should be set aside.

The appellant, a HUF, failed to disclose speculation profit of Rs. 5,54,284/- in the total income for the assessment year 2006-2007. The Assessing Officer added this profit to the income and initiated a penalty under section 271(1)(c) of the Act. The Commissioner(Appeals) upheld the penalty, leading to the appeal before the Tribunal.

The Tribunal dismissed the appeal, emphasizing that the appellant did not offer an explanation for the oversight in not adding the amount to income. Despite the appellant's claim of a genuine mistake, the Tribunal found no basis for exemption from penalty under section 271(1)(c) of the Act.

The High Court upheld the Tribunal's decision, stating that the appellant's failure to disclose the speculation profit constituted a violation of the Income Tax Act. The Court highlighted the statutory provisions allowing penalties for inaccurate particulars of income, concluding that no question of law arose, and thus dismissed the Tax Appeal.