1976 (5) TMI 56 - AT - Income Tax

Summary

Issues:
Penalty under section 271(1)(c) of the IT Act, 1961 for the assessment year 1968-69.

Analysis:
The appeal was filed against the penalty imposed by the ITO under section 271(1)(c) of the IT Act, 1961. The penalty was confirmed by the AAC. The dispute arose from the inclusion of an amount as income representing investments made in the names of minor sons of an individual, which the ITO believed to be from the family funds rather than individual funds. The assessee contended that the investments were made independently by the individual and not from family funds. The ITO initiated penalty proceedings for concealment of income. The AAC upheld the penalty, stating that the investments were not properly explained by the assessee family, and the family had admitted the unexplained investments as income.

The assessee argued that there was no justification for the penalty, as the investments were offered for assessment by the individual in his returns before the assessment on the family. The assessee claimed that the double assessment was illegal and that no income chargeable to tax had escaped assessment. The representative referred to previous tribunal decisions and highlighted that there was no positive finding of concealment of income. The legal representative further argued that the penalty was levied under the wrong jurisdiction and cited relevant case law.

Upon careful consideration, the Tribunal found that there was no intention to conceal the investments made in the names of the minor sons. The Tribunal noted that the Department's case was based on the investments being made from the family funds, but no concrete evidence supported this claim. The Tribunal concluded that the guilt of concealment of income was not proven and that the assessee was entitled to the benefit of doubt. Consequently, the Tribunal canceled the penalty, stating that there was no justification for its imposition.

In conclusion, the Tribunal allowed the appeal, emphasizing that the peculiar facts and circumstances of the case did not establish concealment of income by the assessee. The Tribunal's decision was based on the lack of evidence showing that the investments were made from the family funds, leading to the cancellation of the penalty imposed under section 271(1)(c) of the IT Act, 1961 for the assessment year 1968-69.