1987 (9) TMI 31 - HC - Income Tax

Summary

Issues Involved:
1. Penalty for concealment of income u/s 271(1)(c) of the Income-tax Act, 1961.
2. Concealment of Rs. 16,000 as cash credit.
3. Concealment of Rs. 3,369 as capital gain from the sale of land.
4. Concealment of Rs. 1,010 as annuity deposit refund.

Summary:

1. Penalty for concealment of income u/s 271(1)(c):
The core issue was whether the Appellate Tribunal was justified in cancelling the penalty imposed by the Inspecting Assistant Commissioner u/s 271(1)(c) of the Income-tax Act, 1961, read with the Explanation thereto. The High Court analyzed the Tribunal's findings and the legal principles involved.

2. Concealment of Rs. 16,000 as cash credit:
The assessee claimed that the amount was received from his mother, Bibi Mazidan. The Income-tax Officer found the supporting documents to be forged. However, the Tribunal set aside the penalty, noting that the matter was not conclusively decided in the quantum appeal. The High Court upheld the Tribunal's decision, stating that the assessee had presented a probable defense, effectively rebutting the presumption of concealment u/s 271(1)(c).

3. Concealment of Rs. 3,369 as capital gain from the sale of land:
The assessee sold land but did not produce the sale deed. The Tribunal set aside the penalty, arguing that penalty cannot be levied based on estimated calculations. The High Court disagreed, emphasizing that concealment is always deliberate and that the presumption of concealment u/s 271(1)(c) was not rebutted by the assessee. The Tribunal's decision to cancel the penalty on this count was deemed erroneous.

4. Concealment of Rs. 1,010 as annuity deposit refund:
The assessee received Rs. 1,476 from an annuity bond but reported only Rs. 466. The Tribunal attributed this to a misunderstanding, but the High Court found no basis for this conclusion, stating it was a clear case of concealment of income. The Tribunal's decision to cancel the penalty was overturned by the High Court.

Conclusion:
The High Court ruled partly in favor of the Revenue and partly in favor of the assessee, upholding the cancellation of the penalty for the cash credit of Rs. 16,000 but reinstating the penalties for the capital gain of Rs. 3,369 and the annuity deposit refund of Rs. 1,010.