2015 (8) TMI 1564 - HC - Income Tax

Penalty u/s 271(1)(c) - Appeal is admitted on the following substantial questions of law Whether on a correct interpretation of the provisions of section 271(1)(c) of the Income Tax Act 1961 read with the Explanation 1 appearing thereunder the Tribunal misdirected itself in law and adopted a wholly erroneous approach in upholding the levy of penalty in the instant case on the alleged ground that the Appellant Foundation had concealed its income and/or furnished inaccurate particulars of its income in respect of the assessment year 2011-12 ? Whether the Order passed by the Tribunal upholding the levy of penalty in the instant case of the Appellant Foundation in respect of the assessment year 2011-12 is wholly erroneous in law against the facts and evidences on record wholly baseless unreasonable and/or otherwise perverse? The application disposed of. Let informal Paper Books be prepared and filed in the department and also be served on the respondent/revenue within 8 weeks from date along with the gist of this order.

Summary

Issues involved:
Interpretation of section 271(1)(c) of the Income Tax Act, 1961 with Explanation 1 - Levy of penalty for alleged concealment of income or furnishing inaccurate particulars for the assessment year 2011-12.

Analysis:
The High Court of Calcutta, comprising Hon'ble Justice Soumitra Pal and Hon'ble Justice Mir Dara Sheko, heard the appeal concerning substantial questions of law related to the interpretation of section 271(1)(c) of the Income Tax Act, 1961. The primary issue was whether the Tribunal erred in upholding the penalty of Rs.43,56,900 imposed on the Appellant Foundation for allegedly concealing income or furnishing inaccurate particulars for the assessment year 2011-12. The Court considered the arguments presented by Mr. N. K. Poddar, the senior advocate for the appellant, and Mr. Animesh Kanti Ghoshal, the senior advocate for the respondent/revenue.

The first substantial question of law addressed whether the Tribunal misdirected itself in law and adopted an erroneous approach in confirming the penalty. The Court scrutinized the provisions of section 271(1)(c) along with Explanation 1 to determine the correctness of the penalty imposition. The crux of the matter revolved around whether the Appellant Foundation had indeed concealed income or furnished inaccurate particulars, warranting the penalty amount.

The second substantial question raised the validity of the Tribunal's order dated June 24, 2015, upholding the penalty in question. The Court assessed the legal soundness of the Tribunal's decision in light of the facts and evidence on record. It aimed to ascertain whether the Tribunal's ruling was baseless, unreasonable, or perverse, thus questioning the justification behind the penalty imposition.

Ultimately, the Court disposed of the application, directing the preparation and filing of informal Paper Books within 8 weeks for the department and the respondent/revenue. The matter was scheduled for hearing in the Combined Monthly List of cases for December 2015, with the service of notice of appeal waived due to the respondent's appearance. The judgment encapsulated a detailed analysis of the legal issues surrounding the penalty levy, emphasizing the need for a thorough examination of the facts and legal provisions to determine the correctness of the Tribunal's decision.