1998 (5) TMI 32 - AT - Income Tax

Summary

Issues:
- Penalty under section 271(1)(c) for concealment of income particulars.
- Claim for deduction under section 80T based on judicial pronouncements.
- Justification for penalty imposition based on bona fide belief and legal precedents.

Analysis:

1. The appeal was against the penalty imposed by the AO under section 271(1)(c) for concealing income particulars, which was confirmed by the CIT(A). The assessee claimed a deduction under section 80T based on a total long-term capital gain. However, the AO reduced the deduction, citing changes in the law. The penalty was imposed after the AO found the claim inaccurate, leading to the appeal challenging the penalty.

2. The CIT(A) upheld the penalty, stating that ignorance of the law cannot be an excuse for inaccurate income particulars. The assessee argued that the claim was made in good faith, relying on specific court judgments. The counsel highlighted that the assessee's belief was genuine, supported by legal precedents like Cement Marketing Co. of India Ltd. vs. Asstt. CIT and others. The Departmental Representative supported the lower authorities' decisions.

3. The Tribunal reviewed the case and noted that the assessee had transparently claimed the deduction under section 80T, based on judicial pronouncements. The Tribunal agreed that the assessee acted in good faith and did not conceal income particulars. Referring to legal precedents, including the case law of Cement Marketing Co. of India and CIT vs. Anand Water Meter Mfg. Co., the Tribunal found no justification for the penalty. Consequently, the penalty was deleted, and the appeal was allowed.