1991 (11) TMI 114 - AT - Income Tax

Tribunal Cancels Income Tax Penalties, Orders Refund

Smt. Shanti Devi Gupta. Versus Assistant Commissioner Of Income-Tax.

Smt. Shanti Devi Gupta. Versus Assistant Commissioner Of Income-Tax. - ITD 040, 234, TTJ 043, 083, Issues Involved:1. Penalty under section 271(1)(c) of the Income-tax Act, 1961 for alleged concealment of income.2. Penalty under section 273(a) of the Income-tax Act, 1961 for filing an untrue estimate of advance tax.Detailed Analysis:Penalty under Section 271(1)(c) for Concealment of Income:1. Background:- The appellant was penalized by the Assistant Commissioner of Income-tax for allegedly concealing an income of Rs. 63,000 for the assessment year 1974-75. This included Rs. 32,225 from her own business, M/s. Neeta Prakashan, and Rs. 30,308 from the business conducted in the name of her minor daughter, M/s. Sunita Prakashan.2. Findings by the Commissioner of Income-tax (Appeals):- The CIT(Appeals) upheld the penalty, relying on findings from search and seizure operations showing suppression of sales in both businesses. The CIT(Appeals) confirmed the concealment of income and upheld the penalty.3. Appellant's Arguments:- The appellant's Chartered Accountant argued that the Tribunal had reduced the addition for suppressed sales to approximately Rs. 19,532 and fully deleted the addition related to the minor daughter's business. He argued that the method of accounting followed by the appellant was consistent and accepted by the Department in earlier and later years. He contended that there was no fraud or gross neglect, and the issue was merely an honest difference of opinion regarding the method of accounting.4. Department's Arguments:- The Departmental Representative supported the penalty for the appellant's own business but conceded that no penalty was applicable for the business conducted in the name of the minor daughter, as the Tribunal had deleted the addition.5. Tribunal's Analysis:- The Tribunal examined the facts and noted that the appellant's method of accounting was consistently followed and accepted in other years. The Tribunal found that the addition was due to a difference in accounting methods and not due to any fraudulent intent or gross neglect. The Tribunal referred to the Supreme Court's decision in CIT v. Mussadilal Ram Bharose, which stated that the burden of proof shifts to the assessee to show the difference was not due to fraud or neglect. The Tribunal concluded that the appellant had discharged this burden.6. Conclusion:- The Tribunal held that the penalty under section 271(1)(c) was not justified as the addition was based on estimated profits and was a result of differing accounting methods. The penalty of Rs. 63,000 was canceled and directed to be refunded if already collected.Penalty under Section 273(a) for Filing an Untrue Estimate of Advance Tax:1. Background:- The second appeal involved the penalty for filing an untrue estimate of advance tax under section 273(a) of the Act.2. Tribunal's Analysis:- The Tribunal's detailed reasoning for this issue is not provided in the text. However, it is implied that the Tribunal considered the consistency of the appellant's accounting methods and the acceptance of these methods in other years.3. Conclusion:- Based on the overall findings and the appellant's consistent accounting practices, it is likely that the Tribunal also found that the penalty under section 273(a) was not justified.Summary:The Tribunal found that the penalties under sections 271(1)(c) and 273(a) were not justified. The appellant had consistently followed a particular method of accounting, which was accepted by the Department in other years. The additions made were due to differences in accounting methods rather than any fraudulent intent or gross neglect. Consequently, the penalties were canceled, and any collected amounts were directed to be refunded.