2004 (8) TMI 327 - AT - Income Tax

Summary

Issues: Revenue's appeal against deletion of penalty under s. 18(1)(c) of the WT Act, 1957.

Analysis:
1. The Revenue appealed against the deletion of a penalty amounting to Rs. 1,18,396 under s. 18(1)(c) of the Wealth Tax Act, 1957 by the CWT(A).
2. The assessment was completed under s. 16(3) at a total wealth of Rs. 2,38,19,699, with the assessee initially declaring wealth at Rs. 99,14,000.
3. The AO imposed the penalty after the assessee failed to disclose the particulars of certain lands, leading to concealment of wealth.
4. The assessee contended that the penalty was not justified as it believed the industrial land was exempt from wealth tax and had disclosed all relevant particulars.
5. The CWT(A) deleted the penalty, citing various judicial decisions emphasizing mens rea as an essential element for penalty under s. 271(1)(c) and the importance of bona fide belief in tax matters.
6. The CWT(A) found that the assessee did not deliberately withhold any wealth particulars and that the penalty was not warranted, directing the AO to delete it.
7. The ITAT upheld the CWT(A)'s decision, noting the absence of convincing arguments or case laws from the Revenue to support the imposition of the penalty.
8. The ITAT agreed with the CWT(A) that the penalty deletion was justified based on the facts and applicable case law, dismissing the Revenue's appeal.

In conclusion, the ITAT upheld the decision of the CWT(A) to delete the penalty under s. 18(1)(c) of the WT Act, emphasizing the importance of mens rea and bona fide belief in tax matters. The judgment highlighted the necessity for a deliberate intention to conceal wealth for penalty imposition, which was not present in this case.