TaxTMI 
TaxTMI 
2007 (4) TMI 208
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.... in law in holding that penalty under section 271(1)(c) is not at all leviable on a representative asses see ?" 2. The assessee claimed that he had received gifts from two persons, namely, Mr. Mohan and Mr. Arjundas, residents of Singapore. The amount so received was Rs. 2,36,670 and was treated as income under section 68 of the Income-tax Act, 1961. The addition was upheld by the Commissioner of Income-tax (Appeals). The Tribunal and this court rejected the claim of the assessee. 3. The Assessing Officer thereafter initiated penalty proceedings for concealment of income. There was no confirmation of the donors. The recipient was a minor and therefore, he could have received from someone who is known to the legal representative. The Asses....
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..... He, after hearing, levied penalty in terms of section 271(1)(c) of the Act. The Commissioner was of the view that certain additions were made and those additions were sustained after rejecting the explanation offered by the assessee based on the rules of evidence and the deeming provisions connected with Income-tax assessment under section 68 or 69 of the Act. The Commissioner was of the view that that cannot be a basis for initiating penalty proceedings under section 271(1)(c) of the Act. When the same was challenged, the Tribunal has chosen to accept the case of the assessee. Section 271(1)(c) would read as under : "(1) If the Assessing Officer or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied....
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....n found on an examination of Sri R. V. Kalro and Smt. Shobha R. Kalro, that the gifts could not be genuine. He also noticed the alleged donors have no normal contact in the matter. He noticed that these amounts were brought in the guise of "gifts". He also noticed that the return was filed by Sri. Radhakishandas V. Kalro, father and natural guardian of Master Sunil R. Kalro. He would notice that the books of account are written under his advice and the entry regarding the amount received by draft stated to be gift in the capital account is also made under his advice. The explanation, to say the least, cannot be accepted in the light of a detailed examination of facts by the Assessing Officer. It cannot be said that there is no concealment i....
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....erance. But the Tribunal particularly would hold that the Department has not to come up with much more evidence to establish to the hilt that the amount represented concealed income of the assessee for the year under consideration. Evidence to establish to the hilt is unnecessary for the purpose of levy of penalty. Levy of penalty is available under section 271(1)(c). All that the section requires is to consider the explanation and also proving by the Department with regard to concealment in the case on hand. Materials are staring against the assessee. Therefore, the findings of the Tribunal that the Department has not discharged its duty of concealment in the light of the detailed order of the Assessing Officer and in the light of the star....
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....act, the Kerala High Court in (sic) has ruled that an individual is different from a person. Though, a minor can be an assessee but in the light of the wordings of the "person" under section 271(1)(c), the minor cannot be saddled with penalty. 11. In fact, the Madras High Court in CIT v. R. Srinivasan [1997] 228 ITR 214 has ruled that any sum payable by the guardian on behalf of the minor is recoverable under section 162 of the Act by the guardian including penalty for the default committed by him. The logic is simple. Any omission or commission committed by a representative or a guardian cannot be fastened on the minor in terms of the Act. Therefore, we deem it proper to hold that no penalty can be levied on the minor. 12. The next quest....
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....y of penalty. A reasonable interpretation has to be given with a view to achieve the object of the Act. The object of the Act is to obtain return with accurate particulars for the purpose of levy of tax. Therefore, in fact, the Allahabad High Court has chosen to say that an assessment can be made on the representative-assessee in respect of a minor and also a direct assessment can be made on the minor. But however, the Allahabad High Court has not chosen to say anything with regard to liability of the minor in the matter of penalty. The Madras High Court has however chosen to consider the penalty which could be imposed on the guardian. The Madras High Court (see [1997] 228 ITR 214 ) after noticing sections 162 and 271 has ruled that (page 2....