| Case ID |
261bca23-dfed-46bc-adb0-d1ac98f0c54d |
| Body |
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| Case Number |
I. T. Reference No. 14 of 1967 |
| Decision Date |
Jan 29, 1969 |
| Hearing Date |
|
| Decision |
The Delhi High Court ruled that the penalty imposed under section 28(1)(c) of the Income Tax Act, 1922 was not justified. The court concluded that merely disbelieving the assessee's explanation regarding the source of certain amounts was insufficient for imposing a penalty. The court emphasized that the department must provide additional evidence to establish that the amounts constituted taxable income and that the assessee was guilty of the defaults specified in the Act. The Tribunal's cancellation of the penalty was upheld, affirming that each case must be evaluated based on its specific facts and circumstances. |
| Summary |
This case revolves around the imposition of a penalty under section 28(1)(c) of the Income Tax Act, 1922. The key issue was whether the findings from assessment proceedings could justify a penalty for concealment of income. The assessee, Azad Bharat Finance Company, had provided fixed deposits as security for overdraft facilities, which the tax authorities deemed undisclosed income. However, the Tribunal found that there was no mens rea established by the department to warrant the penalty. The court highlighted the importance of the burden of proof lying with the department to show that the assessee had consciously concealed income. Ultimately, the decision favored the assessee, reinforcing the principle that penalties require clear evidence of deliberate wrongdoing. This case serves as a significant reference point for income tax law and the standards required for imposing penalties for concealment of income. |
| Court |
Delhi High Court
|
| Entities Involved |
AZAD BHARAT FINANCE COMPANY
|
| Judges |
S. K. Kapur,
P. N. Khanna
|
| Lawyers |
A. N. Kirpal,
D. K. Kapur,
K. R. Bajaj,
P. N. Monga
|
| Petitioners |
COMMISSIONER OF INCOME TAX
|
| Respondents |
AZAD BHARAT FINANCE COMPANY
|
| Citations |
1974 SLD 315,
(1975) 31 TAX 253,
(1970) 75 ITR 40,
1973 PTD 124
|
| Other Citations |
CIT v. Gokuldas Harivallabhdas [1958] 34 ITR 98 (Bom.),
CIT v. Anwar Ali [1967] 65 ITR 95 (Cal.),
CIT v. L.H. Vora [1965] 56 ITR 126 (Guj.),
Lal Chand Gopal Das v. CIT [1963] 48 ITR. 324(All.),
Haji Abdul Rahman Abdul Qayum v. CIT [1965] 56 ITR 172 (All.),
Moman Ram Ram Kumar v. CIT [1966] 59 ITR 135 (All.)
|
| Laws Involved |
Income Tax Act, 1922,
Income-tax Act, 1961
|
| Sections |
28(1)(c),
66(1),
271(1)(c)
|