1993 (7) TMI 34 - HC - Income Tax

Act Of 1922, Assessment Proceedings, Assessment Year, Burden Of Proof, Law Applicable To Assessment, Penalty Provisions, Reassessment Proceedings, Supreme Court

Summary

Issues:
Whether the Tribunal was justified in deleting the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 1953-54.

Analysis:
The case involved the imposition of a penalty under section 271(1)(c) of the Income-tax Act, 1961, for concealment of income by the assessee. The Tribunal set aside the penalty, stating that the Department failed to prove that the amount in question represented the assessee's concealed income beyond doubt. The Department argued that the onus to rebut the presumption of concealment was on the assessee, citing the Explanation to section 271(1)(c) read with section 297(2)(g) of the new Act. The assessee relied on the Supreme Court judgment in CIT v. Onkar Saran and Sons, asserting that the law applicable for penalty imposition should be as it stood at the time of filing the original return. The High Court analyzed the applicability of the penal provisions under the old Act and the new Act to determine which law governed the case.

The High Court referred to the Supreme Court decision in CIT v. Anwar Ali, establishing that the law applicable for penalty imposition should align with the provisions in force at the time of filing the original return. It emphasized that the Explanation in section 271(1)(c) of the new Act is integral to the section and must be applied as a whole to a given set of facts. The Court distinguished a previous case, CIT v. Parmanand Advani, where the penalty proceedings were under the new Act, making the Explanation applicable. It concluded that the law declared by the Supreme Court in Onkar Saran and Sons governed the case, and the Tribunal was justified in deleting the penalty.

Regarding the Department's reliance on section 297(2)(g) of the Act, the Court held that it could not go beyond the Supreme Court's decision in Onkar Saran and Sons. It emphasized that the law declared by the Supreme Court binds lower courts, regardless of reasons, and section 297(2)(g) pertained to procedural aspects. Ultimately, the Court ruled in favor of the assessee, agreeing with the Tribunal's decision to delete the penalty. The judgment was delivered by G. C. Bharuka J., with Aftab Alam J. concurring.