2005 (10) TMI 39 - HC - Wealth-tax

Penalty levied by the Assessing Officer under section 18(1)(c) - authorities below have concurrently held that the assessee had no mala fide intention to furnish any inaccurate particulars. It is also not the case of the Revenue that the assessee had the mala fide intention of furnishing inaccurate particulars. Hence penalty cannot be imposed on the assessee as the assessee has no mala fide intention - Tribunal was justified in deleting the penalty levied by the Assessing Officer under section 18(1)(c) of the Wealth-tax Act

Summary

Issues:

1. Appeal against the order of the Income-tax Appellate Tribunal regarding penalty imposition under section 18(1)(c) of the Wealth-tax Act for undervaluing property.

Analysis:

The case involved an appeal against the order of the Income-tax Appellate Tribunal in W.T.A. No. 56/Mds/96, dated March 15, 2004, concerning the imposition of a penalty under section 18(1)(c) of the Wealth-tax Act for undervaluing a property for the assessment year 1988-1989. The appellant, the Revenue, contended that the assessee had declared the property value for less than 70% of its actual value, leading to a penalty of Rs. 2,33,600. However, the Commissioner of Income-tax (Appeals) held that it was not a fit case for a penalty, which was upheld by the Income-tax Appellate Tribunal. The substantial question of law raised was whether the Tribunal was justified in deleting the penalty.

The Gujarat High Court's decision in CWT v. Hasmukhlal Gandalal was cited, emphasizing that a penalty can only be imposed when there is evidence of a male fide intention on the part of the assessee. In that case, it was held that since the assessee had not acted with male fide intention and had disclosed the correct valuation before assessment, no penalty was warranted. Similarly, in the present case, the authorities found no male fide intention on the part of the assessee to furnish inaccurate particulars. The Revenue did not allege any male fide intention either. Consequently, the Tribunal was justified in deleting the penalty under section 18(1)(c) of the Wealth-tax Act.

In conclusion, the court dismissed the appeal, stating that there was no merit in the Revenue's argument. The decision was based on the lack of male fide intention on the part of the assessee, as established by the authorities' concurrent findings. Therefore, the penalty imposition was deemed unjustified, and the Tribunal's decision to delete the penalty was upheld.