1983 (11) TMI 78 - AT - Income Tax

Summary

Issues:
- Appeal against the order of the AAC deleting penalties imposed under section 271(1)(c) for the assessment years 1974-75 and 1975-76.
- Whether the assessee concealed income or furnished inaccurate particulars thereof regarding the value of perquisites.

Analysis:
1. The appeals were directed against penalties imposed by the ITO under section 271(1)(c) for the assessment years 1974-75 and 1975-76, which were subsequently deleted by the AAC.

2. The assessee initially disclosed the value of perquisites in the return, but the ITO later found discrepancies related to rent-free accommodation and free use of a car. The ITO initiated penalty proceedings for concealment of income.

3. The assessee argued that the value of perquisites was disclosed based on the salary certificate and that any discrepancies were due to the ITO's application of a specific rule. The ITO rejected this explanation and imposed penalties.

4. The AAC agreed with the assessee, stating that it was not a fit case for penalty imposition, leading to the appeal against the AAC's decision.

5. The departmental representative contended that the assessee had a duty to disclose the value of perquisites accurately, as per the Act and Rules, and any understatement made the assessee liable for penalties.

6. The assessee's representative argued that the value of perquisites was based on the company's certificate, and any discrepancies were due to the ITO's discretion in evaluating perquisites as per the Act.

7. It was highlighted that the omission regarding the value of the car perquisite was unintentional and had been disclosed in the past, indicating no deliberate concealment.

8. The Tribunal analyzed the provisions related to the determination of the value of rent-free accommodation perquisites and concluded that the assessee had disclosed the value based on the ordinary rule, with the ITO responsible for determining the final value.

9. Regarding the car perquisite, the Tribunal found no deliberate intent to conceal information, as it had been disclosed previously. Consequently, the Tribunal upheld the AAC's decision to cancel the penalties for both assessment years.