Penalty cannot stand without examining absence of intent to evade tax; matter remitted for fresh consideration.

Penalty could not be sustained without first examining the original authority's finding that there was no intention to evade tax, because that finding was central to both the levy and the quantum of penalty. The appellate authority and the Tribunal failed to address the correctness of that finding or its legal effect. The High Court therefore declined to undertake factual scrutiny in a proceeding limited to a substantial question of law and remitted the matter to the Tribunal for fresh consideration in accordance with law. The challenge to the Tribunal's order was not finally decided on the merits.

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Issues: Whether penalty could be sustained without examining the finding recorded by the original authority that there was no intention to evade tax.

Analysis: The original authority had specifically recorded absence of intention to evade. That finding, and its bearing on penalty, ought to have been examined by the appellate authority and the Tribunal. Since neither authority dealt with the correctness of that finding or its effect on the imposition and quantum of penalty, the Court declined to enter into factual scrutiny in a proceeding confined to a substantial question of law.

Conclusion: The matter was remitted to the Tribunal for fresh consideration in accordance with law, and the challenge to the Tribunal's order was not finally decided on merits.

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