1997 (10) TMI 63

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....on 256(2) of the Income-tax Act, 1961 (briefly, "the Act"), the Income-tax Appellate Tribunal referred the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was in law justified in cancelling the penalty imposed by the Income-tax Officer under section 273(c) of the Income-tax Act ?" The facts as found by the Appellate....

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....s declared in Part IV of the return as being the income in respect of which exemption was claimed. If such amount is excluded, the tax on the returned income did not exceed 33 1/3 per cent. of the income on the basis of which the demand notice under section 210 of the Act was issued to the assessee. Therefore, according to the assessee, there was no liability to file an estimate under sub-section ....

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....assessee had committed default as contemplated by clause (c) of section 273, we have to look not at what the final finding in a given case is, but as to what was the impression of the assessee at the time when it had to do what the statute required it to do. As the assessee's conduct manifest from the filing of its return shows, it regarded the aforesaid sum of Rs. 25,27,198 as not being its taxab....

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....e was clearly, of the opinion, may be erroneously, that the sum of Rs. 25,27,198 was not taxable income. Accordingly, it did not include it in its estimate of current income and filed no estimate of advance tax. Looking at the matter from the assessee's standpoint at the relevant time, we do not find this conduct of the assessee dishonest or contumacious. It acted according to its opinion believin....