COMMISSIONER OF INCOME TAX Vs. L. VISHNUDAS

JUDGEMENT

(1.) In this appeal, the following substantial questions of law arise for consideration:

(2.) The Assessing Officer, while computing the taxable income, did not accept the explanation given by the assessee. He proceeded to impose penalty under section 271(1)(c) of the Income-tax Act. Aggrieved by the same, the assessee approached the Commissioner of Income-tax (Appeals). By referring to section 271(1)(c) of the Act and also the declaration made in the initial returns filed on February 6, 1998 and the particulars given in the letter dated February 23, 1998, the Commissioner of Income-tax (Appeals) opined that the contents of the letter amply prove that the assessee had voluntarily requested the Assessing Officer to include income of the HUF in his hands and there was justification for not furnishing the revised return as there was prevention, therefore, there was no justification on the part of the Assessing Officer in imposing penalty. Accordingly, penalty imposed under section 271(1)(c) of the Income-tax Act came to be cancelled.

(3.) Aggrieved by the same, the Revenue approached the Tribunal contending that there was no justification in the order of the appellate authority in interfering with the order of imposition of penalty levied by the Assessing Officer. The Tribunal though made discussion with reference to the particulars furnished by the assessee, ultimately opines that during the assessment proceedings itself omissions were understood by the assessee and immediately rectified the same by bringing to the notice of the authorities by letter dated February 23, 1998 and this being the only recourse that could be taken by the assessee prudently, there was justification in the orders of the first appellate authority cancelling the imposition of penalty levied by the Assessing Officer.