2004 (12) TMI 305 - AT - Income Tax

Summary

Issues:
Appeal by Revenue against consolidated order for imposition of penalty under s. 271(1)(a) of the IT Act, 1961 for asst. yrs. 1985-86 to 1988-89.

Analysis:
The appeals before the Appellate Tribunal ITAT Bangalore-B stemmed from a consolidated order by the CIT(A), Mangalore, concerning the imposition of penalties under s. 271(1)(a) of the IT Act, 1961 for the assessment years 1985-86 to 1988-89. The primary contention in all these appeals revolved around the penalty imposition issue. The assessee had delayed filing income tax returns for the relevant years, citing lack of positive income as the reason for non-filing. The assessee clarified that it was involved in the construction of a hotel in Mangalore during those years but was not actively conducting business operations. Although some additions were sustained regarding construction costs, it was emphasized that these were not related to actual income generation but were based on estimates. The Revenue authorities acknowledged that the assessee had not earned any positive income necessitating the filing of returns. The CIT(A) comprehensively considered the facts, leading to the deletion of other penalties and ultimately deciding to delete the penalties in question. The Tribunal, after reviewing the facts and the CIT(A)'s reasoning, declined to intervene in the matter, thereby confirming the order of the CIT(A).

In conclusion, the Appellate Tribunal dismissed the appeals, affirming the decision of the CIT(A) regarding the imposition of penalties under s. 271(1)(a) of the IT Act, 1961 for the assessment years 1985-86 to 1988-89.