2000 (11) TMI 277 - AT - Income Tax

Summary

Issues involved: Appeal against penalty under section 271B for assessment year 1990-91.

Summary:
The appeal was filed by the assessee against the penalty imposed under section 271B for the assessment year 1990-91, which was confirmed by the CIT(A). The assessee, a sub-broker of shares earning income through commission, argued that the turnover of dealings in shares made on behalf of buyers and sellers should not be considered for determining applicability of section 44AB. The assessee cited a Board's Circular to support this argument. The Departmental Representative supported the CIT(A)'s order.

After considering the submissions, the Appellate Tribunal found no justification for the penalty under section 271B. The Tribunal noted that the assessee had a bona fide belief that the turnover of share dealings should not be included for section 44AB applicability, especially since no penalty proceedings were initiated in past assessments. This belief was considered a reasonable cause under section 271B, leading to the cancellation of the penalty. Consequently, the appeal was allowed.