2006 (2) TMI 105

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..... he assessee filed revised return only when it was pointed out by the Assessing Officer, though under law the assessee was duty-bound to do that and to pay tax accordingly?" - Question is answered in the affirmative, i.e., in favour of the assessee and against the Revenue
Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.-The Income-tax Appellate Tribunal, Ahmedabad Bench "C", has referred the following question under section 256(1) of the Income-tax Act, 1961 (the Act) at the instance of the Commissioner of Income-tax: "Whether, on the facts and circumstances of the case and in law, the Tribunal was right in deleting the penalty levied under section 271(1)(c) by the Assessing .....

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..... receivable. The assessee claimed expenses amounting to Rs. 7,00,110 being expenses which were actually incurred but not provided. A sum of Rs. 5,60,000 was also shown by the assessee as having wrongly been treated as income. The Assessing Officer accepted the aforesaid two errors and ultimately assessed the income at a figure of Rs. 13,44,440. However, when penalty proceedings were initiated and the penalty order was made, the Assessing Officer sought to quantify the penalty with reference to concealment of Rs. 14,03,311 which came to be modified by the Commissioner (Appeals) at a figure of Rs. 7,03,202. The Assessing Officer levied the penalty amounting to Rs. 8,33,566 but the Commissioner of Income-tax (Appeals) granted partial relief by .....

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..... d by the Tribunal that this method of accounting has been accepted by the Department. It has further been recorded by the Tribunal that in these circumstances, in the case of the assessee, a limited company, there would be either nil or negligible tax effect when one considers the fact that an item of work-in-progress which is not shown in year number one is reflected as income in any one of the subsequent years when the amount is actually received and hence, the Department could not allege that the assessee had adopted a systematic device for postponing a part of the tax liability. The Tribunal further goes on to record that, in fact there is no allegation on this count made by the Department and even if the same is taken into consideratio .....

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