1991 (8) TMI 41 - HC - Income Tax

Summary

Issues:
- Justification of Appellate Tribunal in deleting penalty under section 271(l)(c) of the Income-tax Act, 1961.
- Error committed by the Appellate Tribunal in inferring that the assessee did not furnish inaccurate particulars of income.

Analysis:
The case involved a dispute regarding the imposition of a penalty under section 271(l)(c) of the Income-tax Act, 1961 on the assessee for allegedly furnishing inaccurate particulars of income. The assessee had sold its assets to another entity and disclosed this fact in its income tax return for the relevant assessment year. The Income-tax Officer imposed a penalty based on his own computation under section 41(2) of the Act. The Appellate Tribunal reviewed the case, examined the documents, including the sale deed, and concluded that the assessee did not conceal any income. Consequently, the Tribunal set aside the penalty, emphasizing that this was a finding of fact.

The judgment referred to a Supreme Court case, CIT v. Mussadilal Ram Bharose, which established that if the returned income is less than 80% of the assessed income, a presumption is raised against the assessee for concealing income. However, this presumption can be rebutted with relevant and cogent materials. The Tribunal in the present case considered the relevant principles of law and facts on record, leading to the conclusion that the assessee had discharged the onus. As such, the Tribunal's decision was based on factual findings and not a question of law.

The High Court, in its judgment, noted that the departmental representative failed to demonstrate that the Tribunal's factual finding was perverse or vitiated. The Court held that the Tribunal's decision was based on a proper consideration of relevant materials and absence of any irrelevant considerations. Consequently, the Court deemed the reference for a decision under section 256 of the Act as incompetent and rejected it. The judgment concluded that no question of law arose from the Tribunal's order, and no costs were awarded in the case.

In summary, the High Court upheld the Tribunal's decision to set aside the penalty imposed on the assessee under section 271(l)(c) of the Income-tax Act, 1961. The judgment emphasized that the Tribunal's findings were factual and not based on any legal errors. The Court's decision was in line with established legal principles and the absence of any perversity in the Tribunal's factual determination.