Delhi H.C : Whether, on the facts and in the circumstances of the case and having regard to the fact that the assessee agreed to be assessed on an income of Rs. 20,900, the Tribunal was right in holding that a penalty under s. 271(1)(c) could not be imposed ?

High Court Of Delhi

CIT vs. Mool Chand Siri Kishan Dass

Section 271(1)(c)

Asst. Year 1954-55

Arijit Pasayat, C.J. & D.K. Jain, J.

IT Ref. No. 56 of 1980

31st October, 2000

Counsel Appeared

Ajay Jha, for the Revenue : R.P. Bansal with Ms. Bharti Pawar, for the assessee

JUDGMENT

ARIJIT PASAYAT, C.J. :

Pursuant to order dt. 22nd Nov., 1979, in ITC No. 51 of 1978 under s. 256(2) of the IT Act, 1961 (in short “the Act”), Tribunal, Delhi Bench-D (in short “the Tribunal”), has referred the following question for opinion of this Court : “Whether, on the facts and in the circumstances of the case and having regard to the fact that the assessee agreed to be assessed on an income of Rs. 20,900, the Tribunal was right in holding that a penalty under s. 271(1)(c) could not be imposed ?” The assessee filed a return of income from salary at Rs. 1,800. Action was taken under s. 34 of the Indian IT Act, 1922 (in short “old Act”), and reassessment was completed on 28th Aug., 1958, for the asst. yr. 1954-55, which was set aside by the Appellate Assistant Commissioner (in short “the AAC”), vide order dt. 6th Nov., 1959. While making a fresh assessment, the AO made inquiries into the business activities of the assessee who ultimately agreed for assessment on a total income of Rs. 20,900 as per the endorsement in the order-sheet of the AO, dt. 7th Feb., 1973. The ITO initiated penal proceedings and imposed penalty. In appeal, the AAC upheld the decision of the AO. The matter was carried in appeal before the Tribunal which held that merely because there was an agreement for assessment at a particular figure that did not per se bring in the concept of concealment. On the merit it was held that the Revenue did not prove concealment which would enable it to levy penalty under s. 271(1)(c) of the Act. The assessment order, as noted above, was passed on 5th April, 1955. We have heard learned counsel for the parties. Though it was submitted by learned counsel for the Revenue that Explanation added to s. 271 (1)(c) w.e.f. 1st April, 1964, applies, we do not find any substance. In fact the return was filed much earlier to 1st April, 1964, and reassessment was completed on 28th Aug., 1958, which again was set aside by the AAC on 6th Nov., 1959. That being the position, the Tribunal was correct in its view that the Revenue was required to prove concealment. Accordingly, we answer the question referred in the affirmative, i.e., in favour of the assessee, and against the Revenue. The reference stands disposed of.

[Citation : 248 ITR 463]

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