9911796707
|
Home
Issues:
Confirmation of penalty under s. 273(2)(a) of the IT Act for the assessment year 1984-85. Analysis: 1. Background: The assessee declared an income of Rs. 20,820 for the assessment year 1984-85 but was assessed at a total income of Rs. 1,06,000, leading to a penalty notice under s. 273(2)(c) of the Act. The penalty of Rs. 1,948 was imposed by the Assessing Officer (AO). 2. AO and CIT(A) Decisions: The AO imposed the penalty considering the significant variation between the returned and assessed income. The CIT(A) upheld the penalty citing the wider income variation and the assessee's agreement to most additions made during assessment. 3. Assessee's Arguments: The assessee contended that the penalty was incorrectly imposed under s. 273(2)(a) instead of s. 273(2)(c). The assessee also claimed coverage under the Amnesty Scheme, asserting that the circular explaining the scheme should relate back to its effective date. 4. Department's Position: The Department argued that a wrong section reference in the assessment order does not invalidate penalty proceedings. They maintained that the circular's issuance date does not retroactively apply to cases claiming Amnesty Scheme benefits. 5. Tribunal's Decision: The Tribunal held that the penalty imposition under s. 273(2)(a) after initiation under s. 273(2)(c) was legally flawed, citing a previous case precedent. Additionally, the Tribunal found the Amnesty Scheme applicable to the assessee despite the circular's post-issuance date, emphasizing leniency towards covered cases. 6. Merits of Penalty: The Tribunal reasoned that the penalty was unwarranted due to the substantial variation in income, which the assessee could not have predicted during advance tax estimation. Emphasizing the quasi-judicial nature of penalty proceedings, the Tribunal required proof of contumacious conduct for penalty imposition, which was lacking in this case. 7. Conclusion: Ultimately, the Tribunal ruled in favor of the assessee, deleting the penalty and allowing the appeal based on the incorrect penalty imposition, the applicability of the Amnesty Scheme, and the absence of evidence for penalizing the assessee solely based on income variation. Final Verdict: The penalty of Rs. 1,948 under s. 273(2)(a) for the assessment year 1984-85 was deleted, and the appeal was allowed in favor of the assessee.
|
