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The Commissioner of Income-Tax v. M/s.Easun Engineering Company Limited - T.C.(A)No.685 of 2005 [2005] RD-TN 745 (24 October 2005)


Dated: 24/10/2005


The Hon'ble Mr.Justice P.D.DINAKARAN


The Hon'ble Mr.Justice N.KANNADASAN

T.C.(A)No.685 of 2005

The Commissioner of Income-Tax,

Tamil Nadu-I,

Madras. ... Appellant -Vs-

M/s.Easun Engineering Company Limited,

Temple Towers, 6th Floor,

746, Annasalai,

Chennai - 600 035. ... Respondent The above T.C.(Appeals) are preferred under Section 27-A of the Wealth Tax Act, 1957, against the order of the Income Tax Appellate Tribunal, Madras D Bench, dated 15.3.2004 made in WTA No.56/Mds/96. For Appellant : Mrs.Pushya Sitaraman

For Respondent : ---

:J U D G M E N T

(Judgment of the Court was made by P.D.DINAKARAN, J.) The above tax case appeal is directed against the order of the Income-tax Appellate Tribunal in WTA No.56/Mds/96, dated 15.3.2004.

2. The Revenue is the appellant in the above appeal. The assessment year involved is 1988-1989.

3. The assessee is the owner of the land at No.476, Anna Salai, Chennai, to the extent of 24.5 grounds. The case of the revenue is that the assessee declared the value of the property in the Wealth-tax return for less than 70 of the value and hence the assessee is deemed to have concealed the particulars of its assets by furnishing inaccurate particulars. The assessing officer levied minimum penalty of Rs.2 ,33,600/-. Against that order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who held that it is not the fit case to impose penalty and allowed the appeal. It is against the said order revenue approached the Income-tax Appellate Tribunal. The Tribunal upheld the order of the Commissioner of Income-tax ( Appeals) and dismissed the appeal following its earlier orders. It is against that order the revenue has preferred the present appeal, raising the following substantial question of law,

"Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in deleting the penalty levied by the assessing officer under section 18(1)(c) of the Wealth-tax Act?"

4. While considering a similar question, the Gujarat High Court in the decision Commissioner of Wealth-tax Vs. Hasmukhlal Gandalal (264 ITR 42), held that the penalty can be imposed only when the Revenue comes to the conclusion that the assessee had a male fide intention and that as to whether the assessee had mala fide intention, is a question of fact. That is the case, where the concurrent findings of the authorities below were challenged before the High Court and the High Court held as under, "The Deputy Commissioner (Appeals) had come to a conclusion that the assessee had no intention to furnish inaccurate particulars and the said finding had been confirmed by the Tribunal. Therefore, it could not be presumed that the assessee had a mala fide intention to furnish inaccurate particulars. Since the assessee had revealed the correct valuation of the property before the assessment proceedings had been completed, it could not be said that the assessee had furnished inaccurate particulars of the property."

5. In the present case also the authorities below have concurrently held that the assessee had no mala fide intention to furnish any inaccurate particulars. It is also not the case of the revenue that the assessee had the mala fide intention of furnishing inaccurate particulars. Hence penalty cannot be imposed on the assessee as the assessee has no mala fide intention.

6. In this view of the matter, we answer the question in the affirmative against the revenue, holding that the Tribunal was justified in deleting the penalty levied by the assessing officer under section 18 (1)(c) of the Wealth-Tax Act.

7. Consequently, we do not see any merit in the appeal and hence, the same is dismissed. No costs.

Index : Yes

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The Commissioner of Income Tax,



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