Commissioner of Income Tax vs Mrs. Baliect Jolly

This appeal u/s 260A of the Income Tax Act, 1961 by the revenue is directed against the order, dated 14-2-2002 passed by the Income Tax Appellate Tribunal, Delhi Bench ''A'', Delhi in IT Appeal No. 1185 (Delhi) of 1994. The revenue has proposed the following questions, stated to be substantial questions of law :

"1. Whether the Tribunal (hereinafter referred to as the "ITAT") was correct in law in deleting penalty for an amount of Rs. 3,16,601 levied u/s 271(1)(c) ?

Whether order of the ITAT deleting penalty u/s 271(1)(c) was perverse in view of the admission of assessed that amount received from alleged source at Bombay were not directly traceable to her ?"

The only issue which arises for consideration in the present appeal is whether the Tribunal was justified in confirming the order passed by the Commissioner (Appeals), deleting penalty levied on the assessed u/s 271(1)(c) of the Act. The said penalty was imposed for alleged failure on her part to explain the source of a sum of Rs. 6 lakhs claimed to have been taken as loan from one M/s. Laxmi Chand Bhagaji of Bombay. While affirming the order passed by the Commissioner (Appeals), the Tribunal has found that the said loan was taken by means of bank drafts, which were encased through proper banking channels on 12-3-1983 and 15-3-1983; the copies of the bank accounts, placed on record clearly showed that the deposits pertain to the assessment year 1984-85 and the said loans raised against pronotes were duly confirmed by said Laxmi Chand Bhagaji.

The aforenoted findings recorded by the Tribunal are essentially findings of fact, based on the relevant material.

We are also inclined to agree with the Tribunal that since the loans were admittedly raised in the previous year relevant to the assessment year 1984-85, their genuineness had to be examined in the assessment year 1984-85 and, Therefore, the mere fact that the addition sustained in respect of the assessment year 1985-86 on account of said loan was not challenged further by the assessed, does not ipso facto show that the assessed had furnished inaccurate particulars of her income in respect of assessment year 1985-86 and penalty u/s 271(1)(c) of the Act could be sustained on the basis of the order of the Tribunal in quantum appeal.

We do not find any perversity in the order of the Tribunal giving rise to any question of law much less a substantial question of law.

The appeal is accordingly dismissed.