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Issues:
Validity of penalty under s. 271(1)(c) of the Act on the assessee. Analysis: The appeal was filed by the assessee against the order of the CIT(A) for the assessment year 1995-96, which was initially barred by a 3-day limitation. The assessee filed a condonation application explaining that the appeal was filed in time but with a mistake in computer printing, leading to a revised filing a day later. The Tribunal considered the original timely filing and condoned the delay. The main issue in the appeal was the validity of the penalty imposed under section 271(1)(c) of the Act on the assessee. The counsel for the assessee argued that since the assessed income was 'nil' and no tax was payable, no penalty for concealment under the said section should be levied. Citing a Supreme Court case, the counsel contended that the assessee had disclosed all relevant facts, thus no penalty should be imposed. On the other hand, the Departmental Representative argued that even with 'nil' income, the penalty could be levied as per Explanation 4 to section 271(1)(c). Referring to previous decisions, the Representative claimed that the assessee had earned positive income due to brought forward losses, justifying the penalty. After reviewing the submissions and orders, the Tribunal found that the assessed income being 'nil' due to brought forward losses did not warrant a penalty under section 271(1)(c). The Tribunal applied the precedent of the Supreme Court case cited by the assessee and concluded that no concealment of income was evident. It was deemed an honest difference of opinion, leading to the cancellation of the penalty levied on the assessee. In conclusion, the Tribunal allowed the appeal of the assessee, canceling the penalty imposed under section 271(1)(c) of the Act.
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