9911796707
|
Home
Issues Involved:
1. Cancellation of penalty under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 1964-65. 2. Validity of material to hold that the assessee had not deliberately furnished inaccurate particulars of income for the assessment year 1964-65. 3. Cancellation of penalty under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 1966-67. 4. Validity of material to hold that the assessee had not deliberately furnished inaccurate particulars of income for the assessment year 1966-67. Detailed Analysis: Issue 1: Cancellation of Penalty for Assessment Year 1964-65 The Appellate Tribunal canceled the penalty of Rs. 65,000 imposed under section 271(1)(c) of the Act. The Revenue contended that the assessee had concealed particulars of income and produced false account books and materials. The Tribunal, however, found that the evidence showed that the three creditors existed, filed returns, and were assessed. The Tribunal concluded that it was not established that the credits were fictitious or that there was any gross or willful negligence or fraud on the part of the assessee. Issue 2: Validity of Material for Assessment Year 1964-65 The Tribunal's decision was based on the finding that the creditors existed and had filed returns of income. However, the Income-tax Officer found that the credits were falsely introduced, the creditors did not have any ostensible means of livelihood, and the accounts and other materials were fabricated. The Tribunal's conclusion was contrary to the materials and inferences drawn by the Income-tax Officer, who found that the assessee had manipulated confirmatory letters and procured assessment orders to make it appear that the amounts were advanced by the creditors. Issue 3: Cancellation of Penalty for Assessment Year 1966-67 The Tribunal canceled the penalty of Rs. 9,595 imposed under section 271(1)(c) of the Act. The Revenue argued that the assessee had furnished inaccurate particulars of income by claiming fictitious credits. The Tribunal found that the assessment of the credits and disallowance of interest were proper, but it was not established that the claim for the allowance of interest was fictitious or that there was any gross or willful negligence or fraud on the part of the assessee. Issue 4: Validity of Material for Assessment Year 1966-67 The Tribunal's decision was based on the finding that the creditors existed and had filed returns of income. However, the Income-tax Officer found that the credits were falsely introduced, the creditors did not have any ostensible means of livelihood, and the accounts and other materials were fabricated. The Tribunal's conclusion was contrary to the materials and inferences drawn by the Income-tax Officer, who found that the assessee had manipulated confirmatory letters and procured assessment orders to make it appear that the amounts were advanced by the creditors. Conclusion: The High Court concluded that the Tribunal was in error in canceling the penalties for both assessment years. The Tribunal's conclusions were contrary to the factual findings and materials available, which indicated that the assessee had concealed income and furnished inaccurate particulars. The High Court held that section 271(1)(c) of the Act was attracted and the penalties were justified. The questions were answered in the negative and in favor of the Revenue.
|
