1984 (4) TMI 104 - AT - Income Tax

Tribunal Cancels Penalties for Late Filing & Concealment

The tribunal allowed both appeals, canceling the penalties for late filing of return and concealment under section 271(1)(c). The tribunal found that the ... - Issues:1. Penalty for late filing of return2. Penalty for concealment under s. 271(1)(c)Analysis:1. The judgment involves two appeals with identical facts regarding penalties for late filing of return and concealment under s. 271(1)(c). The penalties of Rs. 712 for late filing and Rs. 1,378 for concealment were confirmed by the AAC.2. The assessee, a teacher, gifted Rs. 10,000 to his aunt, triggering gift-tax proceedings and subsequent income-tax assessment. The ITO imposed penalties for late filing and concealment, which were upheld by the AAC.3. The assessee's counsel argued that no penalty was warranted due to lack of explanation or rejection of explanation. The counsel contended that the gift was made in good faith, and there was no intention to evade tax. The Departmental Representative supported the lower authorities' decisions citing the explanation inserted from April 1, 1976.4. The tribunal considered the submissions and found that the assessee's inability to explain the source of Rs. 10,000 did not amount to concealment. The tribunal agreed with the assessee's counsel that the late filing was due to a genuine belief that the gift did not attract tax. The tribunal noted that the explanation provided by the assessee, along with the proviso, negated the need for penalties.5. The tribunal emphasized that the penalties were unjustified as the assessee's explanations were not conclusively rejected. The tribunal highlighted that the reasons for the penalties were insufficient, such as the gift not being to the real sister or aunt. The tribunal concluded that the proviso under the explanation exempted the assessee from concealment penalties, leading to the cancellation of both penalties.6. Consequently, the tribunal allowed both appeals, canceling the penalties for late filing of return and concealment under s. 271(1)(c).