1. Appeals against High Court judgment concerning the justification and calculation of penalties under Section 271(1)(c) of the Income Tax Act, 1961. (Para 1 , 2 )
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1990 Supreme(SC) 514
SUPREME COURT OF INDIA
K.N.Saikia : K.N.Singh : Kuldip Singh
G.C.Agarwal
Versus
Commissioner Of Income-tax, Assam, Nagaland
Case No. : 213 , 215 of 1976
Date of Decision : 9/7/90
The court affirmed that penalties under Section 271(1)(c) of the Income Tax Act, 1961, are justified if legal requirements are met, and the tax avoided for penalty calculation is the difference between the tax on the first return and the tax on the assessed income.
Headnote:(A) Income Tax Act, 1961 - Section 271(1)(c) - Penalties - Justification of penalties for assessment years 1963-64, 1964-65 and 1965-66 - Calculation of penalties - Difference between tax on incomes shown in first returns and tax on incomes assessed to be taken as the amount of tax avoided. (Para 2)
Facts of the case:
The Tribunal referred two questions to the High Court regarding the justification of penalties under section 271(1)(c) of the Income Tax Act, 1961, for the assessment years 1963-64, 1964-65, and 1965-66, and the method for calculating the amount of tax avoided for the purpose of such penalties. The High Court answered both questions against the assessee.
Findings of Court:
The court found no error of law in the order of the High Court that would warrant interference.
Issues: Whether penalties under section 271(1)(c) of the Income Tax Act, 1961, were justified for the assessment years 1963-64, 1964-65, and 1965-66, and whether the difference between the tax on incomes shown in the first returns and the tax on the incomes assessed should be considered the amount of tax avoided for penalty calculation.
Ratio Decidendi: Where the High Court has correctly applied the law to the facts and circumstances of the case, the appellate court will not interfere with the findings.
Result: Appeals dismissed.
Legal Category Hierarchy
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tax law
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income tax
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penalties
- section 271(1)(c) (Para 2)
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penalties
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income tax
Table of Contents
2. Whether penalties under Section 271(1)(c) were justified and whether tax avoided is the difference between tax on first returns and tax on assessed incomes. (Para 2 )
3. The court found no error of law in the High Court's order warranting interference. (Para 4 )
4. The High Court's determination regarding the justification and calculation of penalties under Section 271(1)(c) of the Income Tax Act, 1961, is legally correct. (Para 4 )
5. Appeals dismissed with no order as to costs. (Para 4 )
6. Under what circumstances are penalties under Section 271(1)(c) of the Income Tax Act, 1961, justified?
Penalties under Section 271(1)(c) are justified when the facts and circumstances of the case support the findings of the tribunal and the High Court. (Para 2 , 4 )
7. How is the amount of tax avoided calculated for penalty purposes under the Income Tax Act?
The amount of tax avoided is the difference between the tax on the incomes shown in the first returns and the tax on the incomes assessed. (Para 2 , 4 )
(1) THESE appeals are by way of special leave granted by this court against the judgment and order of the Gauhati High court dated 16/07/1975
(2) THE Income Tax Appellate tribunal referred two questions to the High court under S. 256(1 of the Income Tax Act, 1961 (hereinafter referred to as the Act). These questions-are:
"(1 Whether on the facts and in the circumstances of the case, the tribunal was correct in holding that penalties undersection 271(l)(c) of the Income Tax Act read with Explanation to that section were justified in respect of the assessment years 1963-64, 1964- 65 and 1965-66?
(2 Whether on the facts and in the circumstances of the case, the tribunal was justified in holding that for the purpose of calculation of penalties the difference between the tax on the incomes shown in the first returns and the tax on the incomes assessed shall be taken as the amount of tax that would have been avoided?"
(3) ON a detailed discussion the High court answered both the questions against the assessee. Hence these appeals before this court.
(4) AFTER hearing learned counsel for the parties at length, we do not find any error of law in the order of the High court warranting inter- ference by this court. The appeals fail and are accordingly dismissed but there will be no order as to costs.
