2005 (3) TMI 58

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..... A. M. SAPRE., ASHOK KUMAR TIWARI. JUDGMENT The judgment of the court was delivered by A.M. Sapre J.- This is an income-tax reference made by the Tribunal in F.A. No. 67/Ind/1994 at the instance of the assessee arising out of an appellate order dated March 17, 1994, passed in I.T.A. 680/Ind/1989 for the year 1982-83 to answer the following questions of law: "1. Whether the Tribunal is correct in law to hold that the Income-tax Officer was right in imposing penalty when he has not sought instructions from the Commissioner about the revised return filed under the scheme admitting the addition and whether in such circumstances, the order imposing penalty by the Income-tax Officer is in accordance to law? 2. Whether, on the facts and .....

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..... d giving up the challenge to the addition made, they be extended the benefit of the amnesty scheme by not imposing any penalty on them under section 271(1)(c) of the Act. It is this contention, which did not find favour to the Assessing Officer, but found acceptance with the Commissioner of Income-tax (Appeals). However, in an appeal filed by the Commissioner of Income-tax, the Tribunal reversed the decision of the Commissioner of Income-tax (Appeals) and restored that of the Assessing Officer by imposing a minimum penalty of Rs. 56,000. It is against this decision of the Tribunal, the assessee felt aggrieved and prayed for reference to this court by taking recourse to the provisions of section 256(1) of the Act. The Tribunal acceded to the .....

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..... together, the intention was that only a 'liberal view' in such cases should be taken, that is to say, that strict legality might be mitigated by soft approach, what should be a lenient view would vary from case to case and the Commissioner might have to bear in mind several factors such as the severity of the default, the loss occasioned to the Revenue and a host of other attending circumstances." In this case, one cannot dispute that Circular No. 451 has its application so too the case of the assessee falls in question No. 28 quoted supra. In other words, it is a case where the assessee first contested the addition in appeal, then withdrew the appeal and filed a revised return in relation to the addition which was made the subject-matte .....

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