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Issues involved:
The issue involves the justification of upholding a penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 1969-70. Summary: The case pertains to a firm engaged in film distribution, which filed a return for the assessment year 1969-70 showing a certain income. However, during assessment, it was discovered that certain amounts claimed as amortisation were already included in the profit and loss account, leading to the initiation of penalty proceedings under section 271(1)(c) of the Income-tax Act, 1961. The Income-tax Appellate Tribunal upheld the penalty, citing lack of voluntary disclosure and substantial income difference as reasons. The firm appealed, arguing that the mistake was inadvertent and there was no suppression of facts. The High Court observed that the mistake was accidental and inadvertent, with no evidence of lack of bona fides or gross neglect. Consequently, the imposition of penalty was deemed unjustified. In conclusion, the High Court held that the Tribunal was not justified in upholding the levy of penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 1969-70.
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