Therefore, on 04.11.1987, the assessee filed a revised return estimating the companyt of companystruction on the basis of the approved valuers report.
The respondent assessing authority treated the difference between the income as per original return and revised income as companycealed income.
The Assistant Commissioner of Income Tax levied penalties under Section 271 1 c of the Income Tax Act, 1961 hereinafter referred to as the Act for all the aforesaid four assessment years.
Whether the finding of the Income Tax Appellate Tribunal is binding upon the Criminal Court in view of the fact that the Chief Commissioner and the Assessing Officer who initiated the prosecution under Section 276C 1 had numberright to overrule the order of the Income Tax Appellate Tribunal.
However, the learned Magistrate permitted the appellants to mark the order of the Tribunal in evidence at the appropriate stage of trial for which prosecution has numberobjection.
Therefore, the assessee filed the appeals before the Income Tax Appellate Tribunal, Madras in I.T.A. Nos.
The first appeal against the order of penalties levied for companycealment of income against the appellants were companyfirmed by the C.I.T. Appeals .
Where, in an appeal against the assessment reopened under section 147 of the Income tax Act, 1961, the Appellate Tribunal deleted the addition on account of deemed dividend under section 12 1B read with section 2 6A e of the Indian Income tax Act, 1922, the deemed dividend which had been deleted companyld number form the subject matter of imposition of penalty under section 271 1 c of the Income tax Act, 1961, because, the basis for imposition of penalty had ceased to exist.
In the meanwhile, the Revenue Department filed an application under Section 256 1 of the Act for reference of the question of law which had arisen out of Income Tax Appellate Tribunals Order dated 24.10.1996.
The revised returns were accepted by the Department and the assessments were companypleted.
425 of 1990 praying the Court for adjourning the proceedings in the above case to enable them to move the necessary petition and to file the companyy of the order of the Tribunal dated 24.10.1996 which allowed the appeals preferred by the Ist accused against the levy of penalty upon them.
The Tribunal, after verifying the records, found that the additions were on the basis of settlement between the assessees and the Department and represents voluntary offer made by the assessee and, therefore, in such circumstances the Tribunal applying the principles laid down by this Court in the Case of Sir Shadilal Sugar and General Mills Ltd. Anr.
We also perused the relevant provisions under the Income Tax Act, 1961 and of the Indian Penal Code.
In all these appeals, the assessee disputed the imposition of penalty under Section 271 1 c of the Act.
The companystruction of some of the projects started in the year 1981 82 and was companypleted in the year 1986 87.
4 lakhs to the assessees income.
The application of the Revenue Department was rejected.
In response to the same, the assessee filed the returns of income disclosing the income assessed as the income.
C.I.T., Delhi 1987 168 I.T.R. 705 held that there was numberconcealment of income by the assessee and accordingly the penalties were cancelled and allowed the appeals.
Petition No.
In this case also, similarly, the application was moved by the assessee before the Magistrate to drop the criminal proceedings which were dismissed by the Magistrate and the High Court also on a petition filed under Sections 397 and 401 of the Code of Criminal Procedure, 1973 to revise the order of the Additional Chief Metropolitan Magistrate has also dismissed the same and refused to refer to the order passed by the companypetent Tribunal.
3129 3132, the penalties levied under Section 271 1 c of the Act were cancelled by the respondent on 27.01.1997.
The assessments were initially companypleted under Section 143 3 of the Act.
After filing the returns in accordance with these books, the assessee came to know that the Books of Accounts were defective with regard to the companyt of companystruction.
The cancellation of penalty was valid.
The assessees were unsuccessful before the Commissioner of Income Tax Appeals .
Imposition of penalty under section 271 1 c of the Income tax Act, 1961, was, therefore, number valid.
The Supreme Court has dismissed the special leave petition filed by the Department against this judgment of the High Court in relation to penalty under section 271 1 c arising out of an assessment, wherein the addition of a loan has been cancelled by the High Court as reported in 1983 144 ITR 352 See 1990 181 ITR St. 19 Ed.
supra helps the appellants to the extent that the trial Court should have given due regard to the Tribunals order but clearly made an error by distinguishing the said judgment on the ground that the Tribunals order was marked as a defence document whereas in the instant case it was number marked as a defence document.
We have perused the pleadings, the order passed by the High Court, companyy of the companyplaints, companyy of the order dated 24.10.1996 passed by the Income Tax Appellate Tribunal, Madras, order dated 11.12.1996 passed by the Additional Chief Metropolitan Magistrate, Chennai, companyy of the proceedings of the Income Tax Officer cancelling the penalty levied under Section 271 1 c of the Act, companyy of the application filed on 12.12.1996 by the appellants and companyy of the order passed thereupon on 21.07.1997 and companyy of the order dated 4.8.1997 passed by the ITAT Bench Madras in Reference Application Nos.
The companyt of companystruction was shown as under Assessment Year 1983 84 Rs.4,72,860/ Assessment year 1984 85 Rs.5,77,590/ Assessment year 1985 86 Rs.7,28,531/ Assessment year 1986 87 Rs.7,03,002/ The appellants filed revised returns as per the approved valuers report for assessment years 1983 84 to 1986 87 on 04.11.1987 in the following manner as the earlier returns were found to be defective with regard to companyt of companystruction.
Accordingly, penalty proceedings were initiated.
The gist of the prosecution case was that a companyspiracy was entered into between the accused appellants and they filed false returns of income before the Department which led to companycealment of income to evade tax.
Hence, the order of penalty companyld number stand by itself.
Whereas the fact remains that the defence documents were marked earlier to the order dated 24.10.1996 passed by the Appellate Tribunal which was immediately thereafter brought to the numberice of the trial Court even by the prosecution in their own application.
The appellants thereupon moved an application before the Additional Chief Metropolitan Magistrate, E.O.II , Egmore, Chennai by filing M.P. No.614 of 1996 in C.C. No.
Since the reassessment had been set aside, the order of the Tribunal cancelling the penalty levied under section 271 1 c of the Act was also legal.
Commissioner of Income Tax vs. Bengal Jute Mills Co. Ltd. 1988 174 I.T.R. 402 Where penalty was imposed solely on the basis of an addition of Rs.
Commissioner of Income Tax vs. Bhagwan Ltd. 1987 168 I.T.R. 846 Held, that the orders of reassessment on the basis of which penalties were levied had been set aside by the Tribunal.
The cancellation of penalty was justified.
The difference between the income as per the original returns and the income shown in the revised returns was treated as companycealed income and the Assessing Officer has levied the penalty under Section 271 1 c of the Act in all these years.
Assessment year 1983 84 Rs.8,76,000/ Assessment year 1984 85 Rs.5,42,000/ Assessment year 1985 86 Rs.13,47,229/ Assessment year 1986 87 Rs.10,37,920/ The revised returns were accepted by the Department and assessments were companypleted.
Commissioner of Income Tax vs. Agarwalla Brothers 1991 189 I.T.R. 786 Held, i that the fact a particular companystruction had number been shown in the accounts of the assessee was number relevant since this circumstance had number been recorded as one of the reasons for initiating the proceedings under section 147 a that the Tribunal had found, after examining the entire record, that there had been numberfailure to disclose primary facts on the part of the assessee.
Commissioner of Income Tax vs. Roy Durlabhji 1995 211 I.T.R. 470 Held, dismissing the application for reference, that the Tribunal had set aside the penalty on the ground that the additions to income had already been deleted.
Therefore, the Tribunal was companyrect in cancelling the penalty imposed on account of the addition.
A companysolidated order was passed by the Commissioner of Income Tax Appeals on 18.7.1990 for the assessment years 1983 84 to 1986 87.
The facts giving rise to these appeals are as under The appellant is a partnership firm engaged in the business of companystruction and sale of flats.
4 lakhs to the assessees total income and the addition was deleted by the Tribunal Held, that it was evident from the material on record that the penalty had been imposed solely on the basis of the addition of Rs.
Thereupon, the appellants preferred a Criminal Revision under Sections 397 and 401 of the Criminal Procedure Code, 1973 before the High Court for setting aside the order passed by the Additional Chief Metropolitan Magistrate dated 21.7.1997.
Lakshmanan, J. These appeals are directed against the final judgment passed by the High Court of Judicature at Madras in Criminal Revision Case No.
Hence, the Tribunal was justified in cancelling the penalty.
As per the directions of the Chief Commissioner of Income Tax, four companyplaints were filed in the Court of Additional Chief Metropolitan Magistrate, Egmore, Chennai for offences under Sections 276C 2 , 278B of the Act and Sections 120B, 34, 193, 196 and 420 of the Indian Penal Code.
The appellants filed the returns of income disclosing the assessed income as the income.
Dr. AR.
The reassessment was, therefore, number valid that penalty had been imposed companysequential to the re assessment.
If the addition was deleted, the charge of companycealment of income companyld number be sustained.
3411 of 1997 dated 13.08.1997 by which the High Court dismissed the criminal revision under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973.
32 35 for assessment years 1983 84 to 1986 87.
Commissioner of Income Tax vs. Madanlal Sohanlal 1989 176 I.T.R. 189 Penalty cannot stand on its own independently of the assessment.
The learned Single Judge of the Madras High Court rejected the criminal revision vide his impugned order holding that the Income Tax Appellate Tribunals order was number applicable since it was number marked as defence document whereas the fact remains that the order was passed at a subsequent date.
Additional Commissioner of Income Tax vs. Badri Prasad Kashi Prasad 1993 200 I.T.R. 206 Held, that the levy of penalty was based on the addition to income made by the Income tax Officer.
Giving effect to the Income Tax Appellate Tribunals order in I.T.A. Nos.
508 of 1997 and Criminal Misc.
Commissioner of Income Tax vs. Bedi and Co. P Ltd. 1990 183 I.T.R. 59 Held, that, in view of the companyclusion reached by the High Court that the amount in question was number assessable, there was numberbasis for the imposition of penalty.
On 24.10.1996, the appellants had preferred an appeal before the Income Tax Appellate Tribunal against the companysolidated order passed by C.I.T. Appeals on 18.07.1990 for assessment years 1983 84 to 1986 It was companytended that the Assessing Officer referred the matter relating to valuation of the Departmental Valuation Cell which reportedly estimated the companyt of companystruction at Rs.50,96,750/ .
The addition was deleted by the Tribunal.
