HIGH COURT OF DELHI

Commissioner of Income tax

v.

Prakash Chandra Yadav

MADAN B. LOKUR, AND DR. S. MURALIDHAR, JJ.

INCOME TAX APPEAL NO. 874 OF 2005

September 15, 2007

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1997-98 - For block assessment pertaining to period prior to assessment year in question Assessing Officer had disallowed assessee’s claim of interest on loan by rejecting assessee’s contention that it had taken a loan - That order was challenged in appeal - For assessment year in question assessee took same stand by claiming amount as loan - Assessing Officer disallowed interest and, after giving show-cause notice, levied penalty under section 271(1)(c) - Tribunal, however, deleted penalty - It noted that merely because certain expenses had been disallowed on account of an addition in block assessment that could not be a valid reason for deeming that assessee had concealed income - Whether since assessee’s stand in regard to loan was consistent with its stand taken in appeal in regard to block assessment, it could not be said that explanation on appeal by assessee was not bona fide and, therefore, there was no reason for Assessing Officer to conclude that assessee had concealed income or furnished inaccurate particulars - Held, yes - Whether no substantial question of law arose - Held yes