TMI Blog2005 (11) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation was good enough to justify deletion of the penalty having been considered and concurrently answered in favour of the assessee by the two authorities below, there is no room for interference in appeal by us especially when no substantial question of law arises for consideration - - - - - Dated:- 21-11-2005 - Judge(s) : T. S. THAKUR., B. N. CHATURVEDI. JUDGMENT The judgment of the court was delivered by T.S. Thakur J.- The Commissioner of Income-tax (Appeals) deleted the penalty levied upon the assessee holding that since income from the sale of debentures for the previous assessment year had been treated as capital gains and taxed accordingly, the assessee had a bona fide belief that the same treatment may be given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be imposed without examining as to whether there was a deliberate defiance of law or a conscious disregard of the obligations. The penalty should not be imposed because it was lawful to do so or because there was any technical or venial breach of law. The Assessing Officer has not brought on record any fact or evidence to show such contumacious conduct of the appellant. The appellant could have honestly believed that the income was taxable as capital gains." The Tribunal has affirmed the above line of reasoning and concluded that since the gains arising under identical circumstances had been treated as capital gains by the Assessing Officer, the assessee was under a bona fide belief that for the assessment year under consideration a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had not offered any explanation to the notice calling upon him to show cause against the proposed penalty he must be presumed to have accepted that the income was concealed. In support of that submission he relied upon the Explanation to section 271(1)(c) added with effect from April 1, 1976, and the decision of the Supreme Court in K.P. Madhusudanan v. CIT [2001] 251 ITR 99. He submitted that although the assessee could have made up the deficiency and offered an explanation before the appellate authority, namely, the Commissioner of Income-tax, once such an explanation was offered it was incumbent upon the appellate authority to remand the matter back to the assessing authority for an appropriate order on the said explanation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial, having regard to the nature of the assessee's explanation which did not involve any further investigation. That is because the facts relevant to the explanation were admitted. It is common ground that for the previous assessment year the very same income arising from sale of the debentures had been treated as capital gains and taxed accordingly. The only question was whether the change in the opinion of the Assessing Officer regarding the nature of the income being business income or capital gain would constitute a sufficient cause to avoid the penalty. The Commissioner considered that aspect and for good reasons came to the conclusion that it was not a fit case in which penalty could be imposed. That finding has been rightly affirme ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
