1976 (11) TMI 16 - HC - Income Tax

High Court upholds assessee's appeal on penalty cancellation under section 28(1)(c).

The High Court ruled in favor of the assessee, finding that the Tribunal's decision to cancel the penalty imposed under section 28(1)(c) was not ... Assessment Proceedings, Inaccurate Particulars, Income Tax Act, Jurisdiction Of High Court Issues involved: The judgment involves a reference at the instance of the Commissioner u/s 66(2) of the Indian Income-tax Act, 1922 regarding the cancellation of a penalty imposed u/s 28(1)(c).Judgment Details:Issue 1: Re-framing of QuestionThe court re-framed the question to determine whether the decision of the Tribunal in cancelling the penalty imposed u/s 28(1)(c) was unreasonable or perverse. The re-framed question aimed to bring out the true controversy for determination within the limited jurisdiction of the High Court.Issue 2: Consideration of PenaltyThe court emphasized that the levy of penalty u/s 28(1)(c) is warranted only in cases where the assessee has concealed income particulars or furnished inaccurate details. The Tribunal's decision to cancel the penalty was based on documentary evidence, leading to the conclusion that the department failed to prove the guilt of the assessee, thus benefiting the doubt.Issue 3: Tribunal's ConclusionWhile acknowledging that an alternative view may exist regarding certain disallowed payments, the court held that the Tribunal's decision was not perverse or unreasonable. The Tribunal's conclusion was deemed a possible view based on the facts presented, leading to a ruling in favor of the assessee against the revenue.Conclusion:The re-framed question was answered in the negative and in favor of the assessee. The court highlighted that the Tribunal's decision, though subject to differing interpretations, was not unreasonable or perverse within the limited jurisdiction of the High Court. The parties were directed to bear their own costs for the reference.