Penalty cancellation on factual findings upheld where concealment was not proved and the Tribunal's view was possible on the evidence.

In reference jurisdiction, the High Court will not interfere with a Tribunal's factual cancellation of penalty unless the view is perverse, based on irrelevant considerations, or impossible on the material before it. Penalty under section 28(1)(c) of the Indian Income-tax Act, 1922 requires proof of concealment of income or deliberate furnishing of inaccurate particulars; where the department fails to establish the offence and the Tribunal adopts a possible view on the evidence, its finding must be upheld. On the facts, the Tribunal had given the assessee the benefit of the doubt, and its cancellation of penalty was held not to warrant interference.

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Issues: Whether the Tribunal's cancellation of penalty under section 28(1)(c) of the Indian Income-tax Act, 1922 was unreasonable or perverse.

Analysis: In reference jurisdiction, the Court does not sit in appeal over the Tribunal's findings on predominantly factual matters. Interference is warranted only if the Tribunal has relied on irrelevant considerations or reached a view that is impossible on the material before it. Penalty under section 28(1)(c) can be imposed only where concealment of income or deliberate furnishing of inaccurate particulars is established. On the facts, the Tribunal had taken a possible view and had found that the department failed to prove the alleged offence, giving the assessee the benefit of the doubt.

Conclusion: The Tribunal's decision was not perverse or so unreasonable as to require interference, and the answer was therefore in the negative and in favour of the assessee.

Ratio Decidendi: In reference jurisdiction, a Tribunal's factual finding cancelling penalty cannot be interfered with unless it is perverse or based on irrelevant considerations, and a possible view on the evidence must be upheld.

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