1982 (2) TMI 1 - HC - Income Tax

High Court upholds Tribunal decision deleting penalty under Income-tax Act, citing assessee's financial inability as valid reason.

The High Court of Bombay ruled in favor of the assessee, upholding the Tribunal's decision to delete the penalty under section 221(1) of the Income-tax ... Penalty for default in payment of advance tax - good and sufficient cause for non-payment of advance tax - pure question of fact - appellate review of Tribunal's factual findingPenalty for default in payment of advance tax - good and sufficient cause for non-payment of advance tax - pure question of fact - Deletion of the penalty levied under section 221(1) on the ground that the assessee was financially unable to pay advance tax - HELD THAT: - The Tribunal recorded a factual finding that the assessee was prevented from paying the advance tax due to financial inability and, on that basis, held there was good and sufficient cause for non-payment and deleted the penalty. The High Court held that this is a pure question of fact and that the Tribunal's finding constitutes a finding of fact that there was good and sufficient cause for not paying the advance tax. Consequently, there was no error of law in the Tribunal deleting the penalty.The Tribunal did not err in deleting the penalty; the question is answered in the negative and in favour of the assessee.Final Conclusion: The reference is answered in the negative: on the Tribunal's finding of financial inability constituting good and sufficient cause, deletion of the penalty under section 221(1) is upheld; no order as to costs. The High Court of Bombay ruled in favor of the assessee, stating that the Tribunal did not err in law in deleting the penalty of Rs. 1,000 under section 221(1) of the Income-tax Act, 1961. The Tribunal found that the assessee was unable to pay advance tax due to financial inability, which was considered a valid reason. The question was answered in the negative, favoring the assessee. No costs were awarded.