1983 (4) TMI 100 - AT - Income Tax

Summary

Issues:
Appeal against penalty u/s 27(1)(c) imposed by the IAC

Analysis:
The appeal was filed by the assessee against the penalty imposed under section 27(1)(c) by the Inspecting Assistant Commissioner of Income Tax (IAC). The Income Tax Officer (ITO) during assessment proceedings found that the assessee concealed income by operating under the name of a benami concern. The penalty proceedings were referred to the IAC by the ITO, who then imposed a penalty of Rs. 67,000. The assessee appealed to the Appellate Tribunal, which set aside the IAC's order and directed a fresh decision based on specific grounds. Subsequently, the IAC passed a fresh order imposing a penalty of Rs. 21,000, leading to the current appeal.

During the proceedings before the IAC, the assessee argued that a fresh penalty order could not be passed due to limitations and contended that there was no concealment justifying the penalty. The assessee relied on various legal precedents to support their case. Additionally, the assessee highlighted that penalty proceedings for other years were dropped by the IAC on similar grounds. However, the IAC rejected the limitation argument, stating that the fresh order was passed under the relevant provisions. The IAC discussed the facts, noting that the assessee operated through a benami company and did not disclose income from contract work done under that name. Despite the assessee's submissions, the IAC imposed the penalty of Rs. 21,000.

The assessee's counsel reiterated arguments made before the IAC, emphasizing that penalty cannot be solely based on findings in assessment proceedings. Upon reviewing the IAC's order and relevant documents, the Appellate Tribunal found that the penalty was imposed without sufficient evidence or adequate facts on record. The Tribunal concluded that the penalty was unjustified in the absence of concrete evidence supporting the concealment of income. Consequently, the Tribunal allowed the appeal, canceling the penalty order.

In conclusion, the Appellate Tribunal overturned the penalty imposed by the IAC under section 27(1)(c) due to insufficient evidence and lack of justification for the penalty in the present case.