Law: Income Tax Act, 1961

Section: 271(1)(c)

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1979-80 - Assessing Officer found that certain goods of assessee-company had been rejected before expiry of financial year relating to assessment year in question but value of said rejected goods was not included by assessee in its closing stock - On being confronted, assessee explained it was its bona fide mistake in not including said amount in closing stock - However, he contended that value of rejected goods had been duly entered in books in relevant previous year when said goods were actually received back and also offered same for addition to its total income - But ITO made addition and also levied penalty for concealment of income under section 271(1)(c) - Tribunal accepting explanation of assessee, cancelled penalty - Whether findings recorded by Tribunal were essentially findings of fact, and since same had not shown to be erroneous or perverse, conclusion of Tribunal had to be upheld - Held, yes FACTS During the course of assessment proceedings, the Assessing Officer found that certain goods of the assessee-company, had been rejected prior to the expiry of the financial year relating to the concerned assessment year and the value of the rejected goods was not included in the closing stock. On being confronted, the assessee conceded that it was its bona fide mistake in not including the said amount in the closing stock that the value of said rejected goods had duly been entered in the book in the relevant previous year. The assessee also offered the value of the rejected goods for addition to its total income. The ITO not only made the addition but also levied penalty for concealment of income under section 271(1)(c). On appeal, the AAC accepted the explanation of the assessee and deleted the penalty. On further appeal, the Tribunal upheld the findings of the AAC. On reference : HELD The Tribunal had accepted the explanation of the assessee that it was only because of bona fide mistake that the value of rejected goods were not shown in the closing stock. The findings recorded by the Tribunal were essentially findings of fact which had not been shown to…

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