1979 (3) TMI 33 - HC - Income Tax

Summary

Issues:
1. Penalty under section 60(1)(c) of the E. D. Act, 1953 for concealing property particulars.
2. Constitutional validity of section 60 regarding appeal against penalty orders.
3. Interpretation of "property of the deceased" under section 60(1)(c).

Detailed Analysis:
1. The petitioner contested a penalty of Rs. 34,000 imposed under section 60(1)(c) of the E. D. Act, 1953 by the Appellate Controller for allegedly concealing property particulars and furnishing inaccurate information. The petitioner's father had transferred property to his son and daughter before his death, and the petitioner valued the property at Rs. 1,72,600 based on an approved valuer's report. The Appellate Controller enhanced the valuation to Rs. 37,000 per ground after the property was sold at that rate. The petitioner argued that the penalty was unjust as all details were provided in the return, and the valuation was based on concrete evidence. The court analyzed whether the penalty under section 60(1)(c) applied to the circumstances of the case.

2. The petitioner challenged the constitutional validity of section 60 of the E. D. Act, 1953, for not providing an appeal against penalty orders imposed by the Appellate Controller or Tribunal. The petitioner argued that the lack of appeal rights was unfair compared to penalties imposed by the CED during assessment. The court considered this argument along with the primary issue of penalty imposition under section 60(1)(c).

3. The interpretation of "property of the deceased" under section 60(1)(c) was a crucial aspect of the case. The revenue contended that property deemed to pass under section 9 should be considered as property of the deceased for penalty purposes. However, the court referred to a previous judgment where it was held that section 60(1)(c) does not apply to properties transferred by the deceased before death, as the section pertains to concealment of details of properties owned by the deceased at the time of death. The court applied this principle to the current case, where the property in question was transferred before the deceased's death, and set aside the penalty order.

In conclusion, the court allowed the writ petition, setting aside the penalty order under section 60(1)(c) based on the interpretation that the section did not apply to the circumstances of the case. The court did not delve into the constitutional validity issue due to the primary finding regarding the penalty imposition.