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Issues involved: Appeal against cancellation of penalty u/s 271(1)(c) by Tribunal without considering facts or conclusions drawn by lower authorities.
Summary: The High Court, after reviewing the Tribunal's order, found that the Tribunal failed to consider the nature of additions sustained in assessment and the behavior of the assessee. The Court emphasized that penalty u/s 271(1)(c) is an independent proceeding and does not automatically follow from an assessment. It was noted that the Tribunal did not properly analyze each component of the assessed income to determine if there was concealment as per Section 271(1)(c). As a result, the Court concluded that the Tribunal did not exercise its jurisdiction fairly or properly. The Court allowed the appeal, set aside the Tribunal's order, and remanded the matter back to the Tribunal for a fresh decision, instructing them to consider the facts and provisions of Section 271(1)(c) and provide an opportunity to both sides. The Tribunal was directed to decide the matter within three months and the Revenue was instructed not to proceed with recovery until the Tribunal's decision.
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