9911796707
TMI Blog2007 (3) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... ran J.— The above tax case appeal is directed against the order of the Income-tax Appellate Tribunal dated October 5, 2006, raising the following substantial questions of law : "(a) Whether, on the facts and circumstances of the case, the Tribunal had properly exercised its discretion and was right in deleting the penalty imposed under section 271(1)(c) ? (b) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the Assessing Officer has to prove with evidence that there was a deliberate attempt to conceal income before he could invoke the provisions of section 271(1)(c), ignoring the Explanation 1 to section 271 ?" 2. The facts which led to the rise of the above appeal are as under : The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of any proceedings under this Act, is satisfied that any person—. . . (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,— (i) [Omitted by the Direct Tax Laws (Amendment) Act, 1989, with effect from April 1, 1989] ; (ii) in the cases referred to in clause (b), in addition to tax, if any, payable by him, a sum of ten thousand rupees for each such failure ; (iii) in the cases referred to in clause (c), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit cannot be treated as concealed income for levying penalty, vide CIT v. C. R. Niranjan [1991] 187 ITR 280 (Mad). 7 . The word "income" occurring in clause (c) and sub-clause (iii) of section 271(1) of the Act refers to positive income only and not a loss. Penalty could be imposed only in addition to the tax payable. When there is no tax payable, the question of any penalty does not arise. In fact, evasion of tax is the sine qua non for imposition of penalty. If there is no taxable income or tax assessed for payment during a particular year, the question of evasion and, consequently, penalty do not arise. The penalty provisions of section 271(1)(c), therefore, are attracted only in the case of an assessee having positive income a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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