1989 (3) TMI 161 - AT - Income Tax

Appeal To Tribunal, Assessment Year, Certain Assets, Failure To Pay Advance Tax, False Estimate, High Court, Income Tax, Late Filing, Levy Of Penalty, Penalty For Concealment, Total Income

Summary

Issues Involved:
1. Competency of appeals filed by the assessee.
2. Levy of penalties under sections 271(1)(a), 271(1)(c), and 273(b) of the Income-tax Act.
3. Validity of additional grounds raised by the assessee.
4. Impact of the settlement petition and subsequent waiver petition on the levy of penalties.

Detailed Analysis:

1. Competency of Appeals Filed by the Assessee:
The Tribunal considered whether the appeals filed by the assessee were competent despite the filing of waiver petitions under section 273A. The Tribunal noted that section 273A(5) stipulates that orders under this section are final and cannot be questioned by any court or authority. However, this provision does not preclude the assessee from challenging the imposition of penalties in independent proceedings. The Tribunal cited the Gujarat High Court's decision in *Smt. Kherunissa Allibhai* to support this view, affirming that section 273A is independent and does not bar appeals against penalty levies.

2. Levy of Penalties Under Sections 271(1)(a), 271(1)(c), and 273(b):
The Tribunal examined whether the penalties under these sections were justified. The assessee's counsel argued that the penalties were not warranted as there was no concealment of income or furnishing of inaccurate particulars. The Tribunal noted that the settlement petition indicated the assessee's desire to avoid litigation and buy peace. The Tribunal also considered the Hon'ble High Court's order, which accepted the factual assertions made by the assessee, indicating that the penalties could not be levied based on these facts. The Tribunal concluded that the penalties under sections 271(1)(a), 271(1)(c), and 273(b) were not justified, given the circumstances and the bona fide conduct of the assessee.

3. Validity of Additional Grounds Raised by the Assessee:
The Tribunal addressed the assessee's additional ground, which questioned the quantum of penalty levied. The Tribunal held that this additional ground was a legal issue that did not require further factual investigation and was an aspect of the original grounds of appeal. Therefore, the Tribunal admitted the additional ground, allowing the assessee to argue the relevant provisions of law regarding the quantum of penalties.

4. Impact of the Settlement Petition and Subsequent Waiver Petition on the Levy of Penalties:
The Tribunal analyzed the settlement petition filed by the assessee, which sought to avoid litigation and requested immunity from penalties. The Tribunal noted that the Commissioner of Income-tax's order on the settlement petition indicated that penalties and interest would be levied as per the provisions of the Act, to which the assessee had ostensibly agreed. However, the Tribunal found no material evidence showing that the penalty proceedings were to be waived. The Tribunal emphasized that penalties could only be levied if the requirements of the relevant penal provisions were satisfied, regardless of any agreement by the assessee.

The Tribunal also considered the waiver petition filed by the assessee, which was initially rejected by the Commissioner of Income-tax but later revived by the Hon'ble High Court. The Tribunal noted that the factual assertions made by the assessee in the waiver petition were accepted by the High Court, indicating that penalties could not be levied based on these facts. The Tribunal concluded that the penalties were wrongly imposed and should be canceled.

Conclusion:
The Tribunal allowed the appeals, concluding that the penalties under sections 271(1)(a), 271(1)(c), and 273(b) were not justified based on the facts and circumstances of the case. The Tribunal emphasized the bona fide conduct of the assessee and the lack of evidence supporting the imposition of penalties. The Tribunal also admitted the additional ground raised by the assessee, allowing for a comprehensive review of the quantum of penalties.