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Issues:
1. Penalty imposition under section 271(1)(c) for concealment of income. 2. Enhancement of penalty by the Appellate Authority. Detailed Analysis: 1. The appeal was against the order of the Appellate Commissioner (AAC) relating to the assessment year 1974-75, where the AAC confirmed and enhanced the penalty imposed by the Income Tax Officer (ITO) under section 271(1)(c). The assessee had initially filed a return declaring income, which was accepted under section 143(1) of the IT Act. Subsequently, the assessee filed another return declaring additional income, leading to penalty proceedings initiated by the ITO. The penalty was initially imposed but later cancelled by the AAC. However, the assessee filed yet another return in response to a notice under section 148, leading to further penalty proceedings and imposition of penalty by the ITO, which was later rectified. The AAC confirmed and enhanced the penalty imposed by the ITO, leading to the appeal. 2. The AAC enhanced the penalty by considering the difference between the first return and the third return filed by the assessee. The AAC held that the penalty was to be levied for the concealed interest income and unexplained cash credit. The appellate tribunal analyzed each component of the penalty imposed. Firstly, the tribunal found that the AAC was not justified in enhancing the penalty for a specific amount that had already been considered and cancelled in earlier proceedings. Therefore, the penalty amount related to this specific component was cancelled. Secondly, the tribunal upheld the penalty for interest income not shown in the initial returns, as the default of concealment occurred when it was omitted from the first return. Lastly, the tribunal considered the explanation provided for the cash credit and found that the penalty imposed for a portion of the amount was not justified. The tribunal deleted the penalty related to this specific component, as the explanation provided by the assessee was deemed acceptable. In conclusion, the tribunal partly allowed the appeal, cancelling the enhanced penalty for one component, upholding the penalty for another component, and deleting the penalty for the third component based on the detailed analysis of the facts and legal provisions involved in the case.
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