TMI Blog2009 (11) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... rverse and arbitrary and could not be sustained. - 927 of 2006 - - - Dated:- 6-11-2009 - V. G. SABHAHIT and S. N. SATYANARAYANA JJ M. V. Seshachala for the appellants. S. Parthasarathi for the respondent. JUDGMENT The judgment of the court was delivered by 1. V. G. Sabhahit J.- This appeal is filed by the Revenue being aggrieved by the order passed by the Income-tax Appellate Tribunal, Bangalore Bench (hereinafter called "the Tribunal") in I. T. A. No. 43/Bang/2000, wherein the Tribunal by order dated December 23, 2005, has directed the Assessing Officer to cancel the order of penalty imposed under section 271(1) (c) of the Income-tax Act, 1961 (hereinafter called as "the Act"). This appeal has been admitted on Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (c) read with Explanation 1 by claiming unfounded deductions and he was liable to pay penalty under section 271(1) (c) read with Explanation 4(a) thereto. Hence, penalty proceedings were initiated and the Commissioner of Income-tax (Appeals), Hubli by order dated December 22, 1999, held that the explanation offered by the assessee could not be accepted regarding the deductions which had been claimed of its contribution to the pension scheme and interest on penal charges levied for excess consumption of electricity, in view of the fact that payment of pension had not been made under the provisions of section 43B and accordingly imposed penalty with reference to the total income of Rs.43,80,610 as referred to above. Being aggrieved by the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty can be imposed. However, under Explanation 1 such penalty can be imposed only if the person fails to offer an explanation or offers an explanation which is found by the Commissioner of Income-tax (Appeals) to be false or offers an explanation which he is not able to substantiate and fails to prove such explanation is bona fide and all the facts relating to the same and material to computation of total income have been disclosed by him. Unless there is a finding in that regard as to whether the cause shown in response to the notice for imposition of the penalty is acceptable it is found that the cause shown cannot be accepted, found to be false or the cause is not substantiated or the explanation is not bona fide, penalty can be imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered to be cancelled by the Tribunal and wherefore, the impugned order passed by the Tribunal is perverse and arbitrary and cannot be sustained in the eye of law and the Tribunal being the final authority on the question of fact as this court cannot consider the question of fact, it is appropriate that the matter is remitted to the Tribunal for fresh disposal of the appeal in accordance with law. Accordingly, we pass the following order : 5. The appeal is allowed. We answer the substantial question of law in favour of the Revenue. The order passed by the Tribunal dated December 23, 2005 in I.T.A. No. 43/Bang/2000 is restored and remitted to the file of the Tribunal for fresh disposal of the appeal in accordance with law. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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