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Issues Involved:
1. Whether the filing of the revised return adding Rs. 57,000 on account of double deduction claimed for rain wash was voluntary. 2. Whether the Tribunal was correct in law in confirming the penalty to the extent of Rs. 60,000 for the assessment year 1971-72, especially when a similar penalty imposed for the assessment year 1972-73 was canceled. Summary: Issue 1: Voluntariness of the Revised Return The Tribunal found that the filing of the revised return by the assessee was not voluntary, suggesting it was prompted by the Income-tax Officer's letter dated February 4, 1974. However, the High Court observed that the letter did not indicate any detection of double deduction and was focused on the basis for a 10% rain wash deduction. The High Court concluded that the assessee's revised return was voluntary, as the letter did not alert the assessee to the double deduction issue. The Tribunal's conclusion was deemed unreasonable and not supported by the evidence on record. Issue 2: Legality of the Penalty The Tribunal upheld a penalty of Rs. 60,000 for the assessment year 1971-72, despite canceling a similar penalty for 1972-73. The High Court noted an inconsistency in the Tribunal's approach, as the same explanation of an accountant's mistake was accepted for 1972-73 and implicitly for 1970-71. The Tribunal's rejection of the explanation for 1971-72 was found to be erroneous. The High Court emphasized that the Tribunal did not consider relevant evidence and the conduct of the assessee, leading to an unreasonable conclusion. Consequently, the penalty was deemed improperly upheld. Conclusion: 1. The Tribunal's finding that the revised return was not voluntary was against clear evidence and unreasonable. 2. The Tribunal erred in confirming the penalty for 1971-72, especially given the cancellation of a similar penalty for 1972-73. The reference was disposed of in favor of the assessee, with no order as to costs.
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