| Case ID |
0ffc9ad8-a7ae-4ccb-9452-6aa759234caf |
| Body |
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| Case Number |
IT REFERENCE No. 650 OF 1972 |
| Decision Date |
May 22, 1974 |
| Hearing Date |
|
| Decision |
The Tribunal was justified in law in cancelling the penalty levied under section 271(1)(c). The assessee was not guilty of either fraud or gross or wilful neglect in returning its income. The ITO's rejection of the account books was based solely on the absence of a daily stock register, and there was no evidence to indicate that the assessee had understated sales or inflated expenses. The correct income was determined by applying a flat rate on the returned turnover, which did not constitute fraud or wilful neglect. As such, the penalty imposed was not justified. |
| Summary |
In the case of Commissioner of Income Tax v. Nawab and Brothers, the Allahabad High Court examined the applicability of penalties under section 271(1)(c) of the Income-tax Act, 1961. The court found that the Income Tax Officer (ITO) had rejected the assessee's account books due to the lack of a daily stock register, applying a flat rate to assess income. The Tribunal ruled that the assessee was not guilty of fraud, gross, or wilful neglect in reporting income, leading to the cancellation of the penalty. This case emphasizes the importance of substantiating claims of concealment or inaccurate particulars and highlights the legal presumption involved under section 271(1)(c) when reported income is significantly lower than assessed income. The case serves as a crucial reference point for similar tax disputes, particularly regarding the standards for imposing penalties in income tax cases. |
| Court |
Allahabad High Court
|
| Entities Involved |
Not available
|
| Judges |
Satish Chandra,
H.N. Seth
|
| Lawyers |
Deokinandan,
S.B.L. Srivastava
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Nawab and Brothers
|
| Citations |
1977 SLD 1040,
(1977) 107 ITR 681
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
271(1)(c)
|