1981 (1) TMI 142 - AT - Income Tax

Summary

Issues:
Appeal against cancellation of penalty under section 251(1)(c) of the IT Act, 1961 by the AAC.

Analysis:
The judgment by the Appellate Tribunal ITAT Gauhati involved appeals by the Revenue challenging the cancellation of a penalty of Rs. 25,000 levied by the ITO under section 251(1)(c) of the IT Act, 1961. The Tribunal noted that the appeals had common grounds for all years and parties involved were the same. The Tribunal decided to consolidate the appeals due to commonality in facts and arguments presented by both parties. The Departmental Representative argued that the first appellate authority misdirected itself in canceling the penalty and relied on legal precedents to support their position. On the other hand, the counsel for the assessee supported the impugned orders of the first appellate authority and argued that the returns were filed voluntarily by the assessee. The penalty orders for all assessment years were found to be identical, and the Tribunal reproduced one such penalty order for reference. The penalty order mentioned that the assessee voluntarily disclosed an amount of Rs. 25,000 but could not prove that it was derived during the relevant year, leading to the imposition of a penalty. However, the Tribunal observed discrepancies in the issuance of notice under section 148 of the Act and the filing of returns by the assessee. The Tribunal emphasized that the returns were filed voluntarily before any incriminating evidence was found against the assessee, and the notices under section 148 were issued to regularize the filings. The Tribunal concluded that there was no justification for imposing a penalty based on the facts presented. Additionally, the Tribunal referred to a Supreme Court decision emphasizing the need for cogent material or evidence to levy a penalty in cases of income concealment. Based on the lack of material to support the penalty orders, the Tribunal upheld the orders of the first appellate authority for all assessment years, dismissing the appeals by the Revenue. The Tribunal also noted that the case laws cited did not have relevance to the facts of the assessee's case.