1978 (12) TMI 102 - AT - Income Tax

Summary

Issues:
1. Levy of penalties under section 18(1)(c) for the assessment years 1969-70 to 1971-72.

Comprehensive Analysis:
The judgment by the Appellate Tribunal ITAT MADRAS-B involved three appeals by the assessee against the penalties imposed under section 18(1)(c) for the assessment years 1969-70 to 1971-72. The assessee, an individual, had omitted to include certain inherited movables in the original assessments, which were later disclosed to the WTO. The penalties were initiated for concealment of wealth, and the assessee's appeals before the AAC were unsuccessful, leading to the second appeal before the Tribunal.

The assessee contended that the omission was accidental and not willful concealment, as the omitted amounts belonged to the legal heirs of the deceased grandmother and were subject to disputes among them. The assessee had voluntarily included the amounts in subsequent years to avoid any limitations. The Departmental Representative, however, relied on the orders below to support the penalty imposition.

Upon examination, the Tribunal found that the assessee had disclosed the omitted amounts in the earlier years, indicating a pattern of inadvertent omission rather than intentional concealment. The Tribunal noted that the failure to report the sums in the subsequent years was a mistake and not a deliberate act of concealment. Given the negligible tax amounts involved and the assessee's history of disclosure, the Tribunal concluded that the penalties for concealment of wealth were unwarranted. Consequently, the Tribunal accepted the appeals and canceled the penalties imposed for the assessment years in question.

In summary, the Tribunal ruled in favor of the assessee, determining that the omission of inherited movables from the assessments was a result of inadvertence and not intentional concealment. The Tribunal emphasized the assessee's history of disclosure and the negligible tax amounts involved as factors supporting the decision to cancel the penalties under section 18(1)(c) for the relevant assessment years.