Section 271(1)(b) of the Income Tax Act
The decision most relied on for Section 271(1)(b) is Hindustan Steel Ltd. v. State of Orissa (83 ITR 26), cited in 502 of the 2,912 judgments on BharatTax that turn on this section.
Leading authorities on Section 271(1)(b)
An order imposing penalty for failure to carry out a statutory obligation results from quasi-criminal proceedings. Penalty is not ordinarily imposed unless the party acted deliberately in defiance of law, was guilty of contumacious or dishonest conduct, or acted in conscious disregard of their obligation.
The opportunity of hearing provided to an assessee must be real, effective, and realistic, not merely notional, and tax authorities are incumbent to decide cases on their merits after affording due opportunity.
In the absence of material to show a net profit rate, the presumptive net profit rate of 8% under section 44AD can be used for estimating income. However, this 8% is not a sacrosanct profit ratio and depends on the specific facts of each case.
A substantial delay in filing an appeal requires a proper explanation for the bulk of the period, not necessarily each day.
Penalty under Section 271(1)(b) for non-compliance with notices under Section 143(2) should be restricted to the first default only, as each notice should not trigger a separate penalty.
Penalty under section 271(1)(b) cannot be imposed for each and every notice issued under section 143(2) that remains uncomplied with; it should be restricted to the first default only.
An assessee has a vested right to a personal hearing in faceless assessment proceedings under section 144B. The granting of a personal hearing is not discretionary and must be provided based on the facts of each case, upholding the principles of natural justice.
The principle of natural justice is essential for legal justice, and it can supplement or correct legal justice when the latter fails due to technicalities or omissions in law.
A finding of fact by the Income-tax Appellate Tribunal can be challenged as erroneous in law under section 66(1) if it is not supported by any evidence or is perverse.
Penalty for concealment of income requires circumstances that reasonably point to the conclusion that the disputed amount represented income and the assessee consciously concealed particulars or deliberately furnished inaccurate particulars. An assessee must offer an acceptable explanation for undisclosed income or inaccurate particulars to rebut the presumption of concealment.
