1989 (7) TMI 175 - AT - Income Tax

Assessment Year, Estimated Income, Failure To Pay Advance Tax, False Estimate, Penalty For Concealment

Summary

Issues:
1. Penalty imposed under sec. 271(1)(c) for the assessment years 1979-80, 1980-81, and 1981-82.
2. Penalty levied under sec. 273(2)(b) for the assessment year 1979-80.

Analysis:
1. For the assessment year 1979-80, the assessee contested the addition of Rs. 1,12,000, claiming it was earned in earlier years. The Commissioner confirmed the assessment, but the ITAT found no evidence to support the penalty imposition. The ITAT canceled the penalty under sec. 271(1)(c) for this year.
2. Regarding the assessment year 1980-81, the Commissioner upheld certain additions, including estimated income from handloom goods export. The ITAT analyzed the available cash and upheld a penalty under sec. 271(1)(c) based on the difference between the returned income and the computed total income. The ITAT directed the Income-tax Officer to recompute the penalty amount.
3. For the assessment year 1981-82, the Commissioner estimated the total income at Rs. 4,03,900, including investments made by the assessee. The ITAT found no evidence to support a penalty for a specific amount of Rs. 1,50,000, as the payment was denied by the assessee and no investigation confirmed the payment. The penalty under sec. 271(1)(c) was imposed based on the difference between the computed income and the returned income.
4. Concerning the penalty under sec. 273(2)(b) for the assessment year 1979-80, the ITAT canceled the penalty as there was no evidence to show that the assessee deliberately failed to estimate advance tax. The penalty imposed was deemed unjustified based on the financial background and lack of evidence supporting the penalty. The ITAT allowed the appeals for the assessment years 1979-80, 1980-81 (partially), and 1981-82.