1976 (1) TMI 51 - AT - Income Tax

Summary

Issues:
1. Imposition of penalty under section 271(1)(c) of the IT Act for the assessment year 1972-73.
2. Justification for levying penalty based on concealment or furnishing inaccurate particulars of income.
3. Application of the Explanation to section 271(1)(c) in determining concealment of income.
4. Evaluation of explanations provided by the assessee for non-disclosure of income sources.

Detailed Analysis:
1. The appeal before the Appellate Tribunal ITAT Jabalpur involved the imposition of a penalty by the Income Tax Officer (ITO) under section 271(1)(c) of the IT Act, which was canceled by the Assistant Commissioner of Income Tax (AAC). The penalty of Rs. 7,000 was imposed by the ITO for the non-disclosure of notional annual letting value (A.L.V.) of property, Annuity Deposit Refund, and personal drawings by the assessee in the return filed for the assessment year 1972-73.

2. The ITO levied the penalty citing non-disclosure of income sources by the assessee. The assessee, in response to the show cause notice, explained that the non-disclosure was due to ignorance and not intentional concealment. The AAC accepted the assessee's explanations and canceled the penalty, leading the Revenue to appeal the decision.

3. The Tribunal noted that the case did not fall under the Explanation to section 271(1)(c) as the difference between the income returned and assessed was less than 20% of the assessed income. The Tribunal emphasized the need for the Department to establish concealment as per the Supreme Court judgment in CIT, West Bengal I & Anr. vs. Anwar Ali. The Tribunal found the explanations provided by the assessee regarding the non-disclosure of Annuity Deposit Refund and notional property income to be plausible, attributing the omissions to inadvertent oversight and ignorance rather than intentional concealment.

4. The Tribunal considered the assessee's explanations regarding personal drawings, stating that the additional amount added by the ITO was based on disbelief of the explanation provided by the assessee regarding other sources of income, specifically agricultural income. The Tribunal concluded that there was no deliberate concealment or furnishing of inaccurate particulars of income by the assessee, agreeing with the AAC that the case was not suitable for the imposition of a penalty under section 271(1)(c).

In conclusion, the appeal was dismissed, upholding the cancellation of the penalty by the AAC based on the Tribunal's assessment that there was no intentional concealment or furnishing of inaccurate particulars of income by the assessee.