1986 (3) TMI 126 - AT - Income Tax

Tribunal cancels penalty for concealment under section 271(1)(c) stressing evidence assessment and intent

The Tribunal ruled in favor of the assessee, canceling the penalty imposed for concealment under section 271(1)(c) amounting to Rs. 15,990. Despite ... - Issues:Levy of penalty for concealment under s. 271(1)(c) in a sum of Rs. 15,990.Analysis:The appeal was raised by the assessee challenging the penalty imposed for concealment under section 271(1)(c) amounting to Rs. 15,990, initially fixed by the Income Tax Officer (ITO) and upheld by the Commissioner of Income Tax (Appeals) [CIT(A)].The dispute arose from discrepancies in the total payments shown by the assessee in the profit and loss account. The assessee, a contractor, had displayed payments totaling Rs. 9,78,946. However, conflicting figures were presented by the Executive Engineer and Chief Engineer, indicating payments at Rs. 9,60,886 and Rs. 10,03,100, respectively, resulting in a shortfall of Rs. 24,154.During the assessment, the Chief Engineer's figures were considered, leading to the imposition of a penalty. The assessee contended that a payment of Rs. 19,370, dated 31st March, 1977, was received and encashed on 4th April, 1977, falling into the subsequent financial year. Additionally, a difference of Rs. 5,284 was attributed to a discrepancy in the amount of secured advance received.The assessee's representative argued vehemently, presenting an affidavit and explanations for the discrepancies. The Departmental Representative, however, emphasized the authenticity of the Chief Engineer's figures and raised concerns about the new evidence submitted during the appeal.The Tribunal, after considering the submissions, highlighted the importance of the documents provided by the assessee's representative, cautioning that any falsification would have severe consequences. It acknowledged the discrepancies in the figures but ultimately ruled in favor of the assessee, emphasizing that penalties should not be imposed in the absence of malicious intent. The Tribunal allowed the appeal, canceling the penalty imposed on the assessee.In conclusion, the Tribunal's decision to cancel the penalty was based on the assessment of the evidence provided by the assessee, highlighting the need for verification of the documents but ultimately ruling in favor of the assessee due to the lack of malicious intent and the potential repercussions of false information.