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Commissioner of Income-tax Vs. Smt. Veerawali - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtOrissa High Court
Decided On
Case NumberS.J.C. Nos. 95 to 97 of 1974
Judge
Reported in[1976]104ITR679(Orissa)
ActsIncome Tax Act, 1961 - Sections 271(1)
AppellantCommissioner of Income-tax
RespondentSmt. Veerawali
Appellant AdvocateStanding Counsel
Respondent AdvocateS. Patnaik, Adv.
Cases ReferredD. Halappa Sons v. Commissioner of Income
Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 173(1) proviso; [d. biswas, amitava roy & i.a.ansari, jj] appeal without statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot..........penalty under the orissa sales tax act, that merely because a statute provides for imposition of penalty, penalty is not imposable and, taking the totality of the facts into consideration, it is open to the authority entrusted with imposing of penalty not to impose any at all. the income-tax appellate tribunal exercises same powers as the inspecting assistant commissioner in the matter of imposition of penalty. taking the totality of the facts and circumstances the appellate tribunal has been of the view that it was not a case where penalty was at all imposable. such a conclusion was open to the tribunal to reach within the frame of the law and we do not think any question of law arises.5. this court in the case of commissioner of income-tax v. prafulla kumar mallik :.....
Judgment:

R.N. Misra, J.

1. Under directions of this court made on an application under Section 256(2) of the Income-tax Act, 1961, at the instance of the revenue, the Income-tax Appellate Tribunal, Cuttack Bench, has stated this case and referred the following question for opinion of the court:

'Whether, on the facts and in the circumstances of the case, the learned Tribunal is justified in cancelling the penalties under Section 271(1)(c) of the Income-tax Act ?'

2. The assessee is an individual dealing in mill-made cloth. The relevant assessment years are 1965-66, 1966-67 and 1967-68. The Income-tax Officer did not accept the returned figures of income and made additions. Ultimately, in the hands of the Appellate Tribunal, the assessee's income for the three years in question stood determined at Rs. 20,430, Rs. 15,635 and Rs. 18,670 respectively. The Income-tax Officer initiated penalty proceedings under Section 271(1)(c) of the Act and the Inspecting Assistant Commissioner in exercise of the powers under Section 274(2) of the Act imposed penalties of Rs. 3,000, Rs. 1,600 and Rs. 5,800 respectively.

3. On appeal, the Income-tax Appellate Tribunal vacated the imposition of penalty holding 'the assessee's representative submits that although no cash book and ledger were maintained, extracts of the trading account were tiled with the Income-tax Officer and those were not thrown away by the revenue. The accounts were accepted and thenceforward the Income-tax Officer proceeded to compute the income of the assessee. He further submits that the assessee has not returned the income basing on estimate or guess work. The cases relied upon by the Inspecting Assistant Commissioner have no relevance in the facts and circumstances of the present case. In those cases, the Appellate Tribunal found that the assessee did not maintain any sort of accounts and that the returns were filed on estimate basis. Since shred of accounts was maintained and examined by the revenue, merely because the assessee's returned income could not be substantiated by contemporaneous evidence, it could not be said that the assessee's showing of lower income was due to her gross negligence. Even the estimate made by the revenue has been reduced in appeal by the Appellate Tribunal and, therefore, it cannot be said that what income had been assessed by the Income-tax Officer was correct income of the assessee'. Taking the totality of evidence, the Appellate Tribunal came to the conclusion that the levy of penalty was unsustainable and, therefore, cancelled the same.

4. It has been indicated by the Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa : [1972]83ITR26(SC) , dealing with imposition of penalty under the Orissa Sales Tax Act, that merely because a statute provides for imposition of penalty, penalty is not imposable and, taking the totality of the facts into consideration, it is open to the authority entrusted with imposing of penalty not to impose any at all. The Income-tax Appellate Tribunal exercises same powers as the Inspecting Assistant Commissioner in the matter of imposition of penalty. Taking the totality of the facts and circumstances the Appellate Tribunal has been of the view that it was not a case where penalty was at all imposable. Such a conclusion was open to the Tribunal to reach within the frame of the law and we do not think any question of law arises.

5. This court in the case of Commissioner of Income-tax v. Prafulla Kumar Mallik : [1976]104ITR648(Orissa) declined to interfere when it appeared to it on a review of the matter that the totality of the facts had been taken into account by the Appellate Tribunal in vacating the imposition of penalty. The counsel for the assessee has also placed reliance on the decisions of the Mysore High Court in the case of D. Halappa Sons v. Commissioner of Income-tax : [1974]95ITR542(KAR) and of the Kerala High Court in the case of Commissioner of Income-tax v. Sankarsons and Co. : [1972]85ITR627(Ker) . The Appellate Tribunal taking an overall picture of the matter decided not to impose penalty. This question is one of fact and no question of law arises for determination of the court. We would accordingly hold:

'In the facts and circumstances of the case, the learned Appellate Tribunal is justified in cancelling the penalty under Section 271(1)(c) of the Income-tax Act.'

6. We make no order as to costs.

Das, J.

7. I agree.


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