9911796707
|
Home
Issues Involved:
1. Jurisdiction and correctness of the Tribunal in upholding the imposition of penalty with reference to an amount not considered by the Inspecting Assistant Commissioner (IAC). 2. Applicability of Section 271(1)(c) of the Income Tax Act to the amount declared by the assessee in Part F of his return. Detailed Analysis: Issue 1: Jurisdiction and Correctness of Tribunal's Decision on Penalty The first issue pertains to whether the Tribunal acted within its jurisdiction and was correct in law in upholding the imposition of penalty concerning the amount of Rs. 1,88,800, which was not the basis for the IAC's order. The Income Tax Officer (ITO) had initiated penalty proceedings and referred the case to the IAC under Section 271(1)(c) of the Income Tax Act, 1961, due to certain hundi loans and claimed winnings from horse races. The ITO added the amounts as the assessee's income from "other sources" due to lack of evidence. The IAC imposed a penalty after issuing a notice under Section 274(2) read with Section 271(1)(c) and giving the assessee an opportunity to be heard. The IAC's order focused on the hundi loans and the wife's income not correctly shown in the husband's return. However, the Tribunal upheld the penalty based on the addition of Rs. 1,88,800, which was claimed as horse race winnings but found to be unaccounted money. The Tribunal's decision was challenged on the grounds that it upheld the penalty for an amount not considered by the IAC. The court held that the Tribunal could not uphold the penalty on different grounds than those considered by the IAC. The subject matter of the appeal is confined to the grounds raised, and the Tribunal cannot introduce new grounds not considered by the IAC. Issue 2: Applicability of Section 271(1)(c) to the Declared Amount The second issue involves whether the amount of Rs. 1,83,737 declared by the assessee in Part F of his return could attract the provisions of Section 271(1)(c). The assessee argued that since the amount was declared, it should not attract penalty provisions. However, the court noted that merely declaring an amount does not exempt it from scrutiny if the declaration is found to be false or misleading. The court referred to the Supreme Court's decision in ITO v. Madnani Engineering Works Ltd., where it was held that if the assessee has produced all relevant documents, the onus is on the ITO to prove that the documents are false. In this case, the assessee's claim of horse race winnings was found to be false, and the ITO's investigation revealed that the amount was unaccounted income. The court concluded that the initiation of penalty proceedings by the ITO was justified as there was deliberate concealment of income. The IAC's and Tribunal's findings supported the imposition of penalty under Section 271(1)(c) due to the false declaration of income. Conclusion: - Question 1: The Tribunal acted beyond its jurisdiction by upholding the penalty on grounds not considered by the IAC. Therefore, the court answered this question in the negative, in favor of the assessee. - Question 2: The provisions of Section 271(1)(c) were applicable to the declared amount as the assessee's declaration was found to be false. The court answered this question in the affirmative, confirming the initiation of proceedings by the ITO was in order, but the Tribunal's final order was beyond the subject matter of the appeal. In the facts and circumstances of the case, each party was ordered to bear their own costs.
|
