COMMISSIONER OF INCOME TAX IV Vs. ADMIRALITY HOTEL

JUDGEMENT

(1.) (Tax Case Appeal preferred under section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal dated 16.10.2003 in ITA. Nos.1822/Mds/94.) The relevant assessment year is 1986-87. The assessee is an unregistered firm. It filed its return for the above assessment year. It had deleted an immovable asset in its balance sheet. On enquiry it was found that the assessee had sold the said asset for Rs.6.00 lakhs and thereby concealed the income arising out of the capital gains. The assessing officer accordingly initiated penal proceedings and levied penalty at Rs.2,05,000/- under section 271(1)(c) of the Income Tax Act. On appeal, the Commissioner of Income Tax (Appeals), while confirming the correctness of the imposition of penalty, enhanced the same to Rs.4,10,000/- for the reasons stated therein. The assessee took the matter on appeal to the Income Tax Appellate Tribunal. The Tribunal allowed the appeal in favour of the assessee. The correctness of the same is now put in issue before this Court on the ground that the appellate Tribunal has miserably failed to note that the assessee had deleted the particulars of the assets from the balance sheet and the submission of the improper particulars warrants levy of penalty under section 271(1)(c) of the Income Tax Act, 1961.

(2.) HEARD the learned counsel on either side and perused the materials available on record.

(3.) HAVING regard to the nature of the penal provisions, the Court further held that the more the law is stringent, more strict a construction thereof would be necessary. Even when the burden is required to be discharged by an assessee, it would not be as heavy as that on the prosecution.