Commissioner of Income Tax vs Raja Corporation

Ratnam, J.—In these tax case petitions u/s 256(2) of the Income Tax Act, 1961, the Revenue seeks a direction to the Tribunal to refer the

following common question of law for the opinion of this court.

Whether, on facts and in the circumstances of the case, the Appellate Tribunal was right in cancelling the penalty u/s 271(1)(c) of the Income Tax

Act, 1961 ?

We find from the order of the Tribunal that it was persuaded to delete the penalty imposed on the assessee on the footing that there had been

errors in the totalling in the books of account of the assessee and after those mistakes were found out, the assessee had voluntarily informed the

authorities and had also filed revised returns. In this background, the Tribunal took the view that there could not have been any concealment of the

particulars of income by the assessee justifying the levy of penalty. The Tribunal was quite justified in the view it took, for, it is seen that the

assessee had apprised the authorities on March 20, 1984, stating that there were totalling mistakes in the books of account for the assessment

years 1976-77 to 1980-81, and that there had been an excess totalling in respect of the assessment year 1980-81, though we are concerned in

these applications with the assessment years 1977-78 to 1980-81. We also find that the books of account had been produced by the assessee

before the authorities and they had not also discovered any mistakes, but the totalling errors and excess totalling were brought to the notice of the

authorities by the assessee and this was also followed by the filing of the revised returns. Under the aforesaid circumstances, the assessee cannot

be taken to task by the levy of penalty, as the assessee was not aware of the errors originally and they were discovered by the assessee later and

immediately, the assessee had brought it to the notice of the authorities by a letter as well as revised returns. We are, therefore, of the view that, on

a consideration of the facts and circumstances of the case, the Tribunal was quite justified in deleting the imposition of penalty on the assessee and

we are of the view that no referable question of law can be said to arise out of the order of the Tribunal. These tax case petitions are, therefore,

dismissed. No costs.