2009 (11) TMI 462

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....d the Assessing Officer to cancel the order of penalty imposed under section 271(1) (c) of the Income-tax Act, 1961 (hereinafter called as "the Act"). This appeal has been admitted on February 28, 2007. 2. Though four substantial questions of law have been framed in the appeal memorandum, having regard to the contentions urged by the learned counsel appearing for the parties in this appeal, the only substantial question of law that arises for determination in this appeal is whether the order cancelling the penalty imposed under section 271(1) (c) of the Act without giving a finding about the satisfactory cause shown by the assessee is perverse and arbitrary and calls for interference in this appeal. In the return filed by the assessee fo....

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....t of pension had not been made under the provisions of section 43B and accordingly imposed penalty with reference to the total income of Rs.43,80,610 as referred to above. Being aggrieved by the said order passed by the appellate authority, the assessee preferred I. T. A. No. 43/Bang/2000 which was clubbed with other appeals and the Tribunal by order dated December 23, 2005, partly allowed the appeal and directed the Assessing Officer to cancel the order of penalty imposed by the impugned order.  Being aggrieved by the said order of the Tribunal in so far as it relates to cancellation of the order of penalty, this appeal is filed by the Revenue under section 260A of the Act contending that the Tribunal has not at all applied its mind a....

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....or imposition of the penalty is acceptable it is found that the cause shown cannot be accepted, found to be false or the cause is not substantiated or the explanation is not bona fide, penalty can be imposed and wherefore it is necessary to consider the cause shown by the assessee in response to the notice under section 271(1) (c) of the Act. Mere perusal of the order passed by the Tribunal would clearly show that the Tribunal has proceeded on the basis in paragraph 12 of its order impugned in this appeal that imposition of penalty under section 271(1) (c) is not automatic and they do not find any material in support of the observation of the Assessing Officer that the assessee had furnished inaccurate particulars of income. At best it may ....