1993 (3) TMI 33 - HC - Income Tax

Summary

Issues:
1. Justification of the Tribunal in determining the date of concealment for penalty imposition.
2. Reduction of penalty amount by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal.

Analysis:
The case involved questions of law arising from an order by the Income-tax Appellate Tribunal regarding the assessment year 1966-67. The Tribunal had to determine the date of concealment for penalty imposition and the appropriate penalty amount. Initially, the assessment was completed on a total income of Rs. 5,159, but later, it was discovered that the assessee was conducting business mainly in gold off the books. This led to reassessment, resulting in a higher total income. The penalty was imposed under section 271(1)(c) after the Income-tax Officer initiated proceedings. The assessee contended that the penalty was not justified, and the quantum of penalty was disputed.

The Appellate Assistant Commissioner and the Income-tax Appellate Tribunal assessed the concealment date as July 24, 1967, when the original return was filed. They relied on legal precedents, including the decision in Chunnilal Mahajan v. CIT, emphasizing that penalty for concealment should be imposed based on the law prevailing at the time of the act of concealment. The satisfaction of the Income-tax Officer is crucial for initiating the penalty, and the offence occurs when inaccurate particulars are furnished during the return submission.

The Tribunal and the Commissioner reduced the penalty from Rs. 7,118 to Rs. 1,000, considering the law applicable on the date of the original return filing. This decision was supported by the apex court's ruling in CIT v. Onkar Saran and Sons, confirming that penalty imposition for concealment should align with the law at the time of filing the original return. The Tribunal's decision was deemed justified based on established legal principles and precedents.

In conclusion, the High Court upheld the decisions of the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal, ruling in favor of the assessee and against the Revenue. The reference was answered in favor of the assessee, with no costs imposed. The judgment reaffirmed the importance of applying the law prevailing at the time of concealment for penalty imposition, as established by legal precedents and the apex court's decision.