2000 (5) TMI 14

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....---By this reference made under section 256(2) of the Income-tax Act, 1961 (the "Act"), the Income-tax Appellate Tribunal (the "Tribunal"), has referred the following question of law to this court for opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal had misdirected itself in law in deleting the penalty imposed by the Inspecting Assistant Commissioner of Income....

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....to disclose the commission income of Rs. 9,000 in the original return was inadvertent and not intentional, no penalty could be levied under section 271(1)(c) of the Act. The Inspecting Assistant Commissioner did not accept the above contention of the assessee and levied penalty of Rs. 9,000 under section 271(1)(c) of the Act. It is this penalty which was deleted by the Tribunal. The Tribunal arriv....

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....in view of this finding of fact that the Tribunal has held that no penalty could be imposed under section 271(1)(c) of the Act. We do not find any infirmity in the above conclusion of the Tribunal. Law is well-settled that an order imposing penalty is a result of quasi-criminal proceedings and penalty should not ordinarily be imposed unless the party obliged either acted deliberately in defianc....

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....hen the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. In the present case, there is a categorical finding of the Tribunal that the omission to disclose the commission income of Rs. 9,000 in the original return was not intentional. In the face of this finding, the penalty levied by the Inspecting Assistant Commissioner under sec....