2004 (9) TMI 292 - AT - Income Tax

Summary

Issues:
Appeal against deletion of penalty under s. 158BFA(2) of the IT Act for block assessment years 1987-88 to 1997-98.

Analysis:
The case involved the deletion of a penalty imposed under s. 158BFA(2) of the IT Act for block assessment years starting from 1987-88 to 1997-98. The search and seizure operation revealed gold/diamond ornaments in a bank locker, with the assessee confirming ownership. The assessee filed a return disclosing the value of the jewellery and paid the tax. However, the penalty was imposed by the AO for paying tax at a normal rate instead of the higher rate for block assessment. The CIT(A) deleted the penalty, considering the assessee's cooperation with the department, timely filing of returns, and lack of fraudulent intent. The CIT(A) applied criteria from various judgments to conclude that the penalty was unjustified.

The Tribunal noted that the assessee voluntarily disclosed the value of the jewellery, paid taxes on it, and even paid the difference of tax at a higher rate without contesting. The assessee claimed a lack of understanding of the procedure when responding to the penalty notice. The Tribunal upheld the CIT(A)'s decision, emphasizing the assessee's compliance, cooperation, and lack of fraudulent intent. The Tribunal found no reason to interfere with the CIT(A)'s findings, ultimately dismissing the Revenue's appeal against the deletion of the penalty under s. 158BFA(2) for the block assessment years in question.