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Commissioner of Income-tax (Central), Bombay Vs. Hind Rajasthan Construction Company - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Application No. 133 of 1977
Judge
Reported in[1979]116ITR304(Bom)
ActsIncome Tax Act, 1961 - Sections 256(2) and 271(1)
AppellantCommissioner of Income-tax (Central), Bombay
RespondentHind Rajasthan Construction Company
Appellant AdvocateR.J. Joshi, Adv.
Respondent AdvocateD. Vyas, Adv.
Excerpt:
direct taxation - penalty - sections 256 (2) and 271 (1) of income-tax act, 1961 - appeal against order of income-tax appellate tribunal - appellate tribunal held levy of penalty on assessee under section 271 (1) (c) not justified - assessee filed revised income-tax return - tribunal assessed income higher than filed in revised return - imposed penalty on assessee - facts revealed shifting of income for later year to assessment year - accounting method consistent - no mala fide intention on part of assessee - referring question before commissioner will not serve any purpose - rule stands discharged. - .....bench d, in i.t.a. no. 4477(bom) of the 1973-74, which is for assessment year 1968-69. for this year, the assessee had shown in its revised income-tax return an income of rs. 1,36,473, whereas ultimately the income as upheld by the tribunal was rs. 5,36,660. penalty proceedings were taken. the iac held that the penalty was exigible and levied the penalty of rs. 3,92,000. 3. the learned counsel for the assessee drew our attention to the order of the tribunal to be found in paras. 6 to 8. the tribunal considered the circumstances under which the returned income had been inflated to the higher figure as ultimately found. the tribunal found that the ito had filed to detect any omission of sale or profit, but there was a shifting of the income shown by the assessee for a later year to the.....
Judgment:

Desai, J.

1. By this application the Commissioner wants the following three questions to be found in para. 5 of the application to be referred to the High Court.

'(1) Whether, on the facts and in the circumstances of the case and in law, the Appellate Tribunal was justified in holding that there was no proper case for the levy of penalty of Rs. 3,92,000 under s. 271(1)(c) of the Act in the case of the assessee and in consequently cancelling it

(2) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that means rea had not been established in the case

(3) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in coming to the conclusion that the assessee had discharged the onus laid down upon it under the Expln. to s. 271(1)(c) of the Act and that consequently no penalty under the said section would be leviable ?'

2. The application arises from the order of the Income-tax Appellate Tribunal, Bombay Bench D, in I.T.A. No. 4477(Bom) of the 1973-74, which is for assessment year 1968-69. For this year, the assessee had shown in its revised income-tax return an income of Rs. 1,36,473, whereas ultimately the income as upheld by the Tribunal was Rs. 5,36,660. Penalty proceedings were taken. The IAC held that the penalty was exigible and levied the penalty of Rs. 3,92,000.

3. The learned counsel for the assessee drew our attention to the order of the Tribunal to be found in paras. 6 to 8. The Tribunal considered the circumstances under which the returned income had been inflated to the higher figure as ultimately found. The Tribunal found that the ITO had filed to detect any omission of sale or profit, but there was a shifting of the income shown by the assessee for a later year to the assessment year in question. As far as the method of accounting is concerned, it was found by the Tribunal that there was a consistent method of accounting and the manner was not found to be in any wise mala fide or a device for showing lower profit than was showable. The Tribunal considered the main provision of s. 271(1)(c) and observed in its order that the mental element, i.e., any intention had not been established. The Tribunal thereafter went on also to consider the Explanation and held on the material on record and on the submissions before it that the assessee should be held to have discharged the onus which was cast on him by the Explanation. It is difficult to find fault with the thorough approach of the Tribunal, though a few expressions used in the order here and there may be objected to. We are of opinion that no useful purpose will be served by referring the three questions sought by the Commissioner as the order, on the material before the Tribunal, is a proper one and will have to be ultimately sustained.

4. In the result, the rule will stand discharged, but with no order as to costs.


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