INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)Concealment Bona fide mistake--During the course of the assessment proceedings, assessee was asked to give details of interest on tax-free bonds. While preparing the said details, it was noticed that 6% Government of India Capital Index Bonds purchased during the year had inadvertently been categorized as tax-free bonds and, therefore, interest earned on such bonds had also inadvertently escaped tax. The assessing officer, therefore, levied penalty under section 271(1)(c) for the same. Held: Was not justified, as there was no desire on the part of assessee to hide or conceal the income so as to avoid payment of tax on interest from the bonds. Moreso, the decision of the Tribunal was based on finding of fact that there was an inadvertent mistake on the part of assessee in including the interest received at the rate of 6 per cent on the Government of India Capital Index Bonds, as interest received on tax-free bonds, and it was not contended by the revenue that above finding of fact by the Tribunal was perverse.

Income Tax Act, 1961 Section 271(1)(c)

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--Concealment Disallowance of claim--Assessee had claimed premium on redemption of debentures as income from capital gains. Whereas the assessing officer held that the redemption of debentures was revenue receipt assessable to tax under the head income from other sources. Commissioner (Appeals) confirmed the order of the assessing officer and assessee did not file any further appeal on the quantum proceedings. Thereafter, the assessing officer levied penalty under section 271(1)(c) Held: Was not justified as the penalty imposed under Section 271(1)(c) of the Act was to be deleted. More so, the revenue had not been able to point out that the finding of the Tribunal was perverse therefore, no Substantial question of law arose for consideration.