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TMI Blog2004 (6) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... : S. SANKARASUBBAN., A. K. BASHEER. JUDGMENT The judgment of the court was delivered by S. Sankarasubban J. -The above I.T.R. has been referred to this court by the Income-tax Appellate Tribunal, Cochin Bench, in R.A. No. 194/Coch of 1996. As per the reference, three questions of law are referred to this court; they are: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal should have decided the appeal in the light of the Explanation to section 271(1)(c) or remitted the case back to the assessing authority to be considered in the light of the Explanation? (2) Whether, on the facts and in the circumstances of the case, the Explanation being part of the main provisions of section 271(1)(c), the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,725. Thereafter, the Assessing Officer initiated penalty proceedings under section 271(1)(c), and after considering the assessee's explanation, he came to the conclusion that penalty was leviable. A penalty of Rs. 2,50,000 was thus levied on the assessee. In the appeal against the levy of penalty, the Commissioner of Income-tax (Appeals) analysed the addition under various heads and held that there was no case for levying penalty and accordingly he cancelled the penalty levied on the assessee. The Revenue took up the matter in appeal before the Tribunal. The Tribunal held on the facts that no penalty was leviable and it further held that since no notice was issued under the Explanation, penalty proceedings cannot be passed. It is against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncealed the particulars of his income or furnished inaccurate particulars..." In CIT v. Warasat Hussain [1988] 171 ITR 405, the Patna High Court held thus: "Assessment by estimate is one of the known processes in the taxation world. Where the assessee conceals relevant material/evidence, the Revenue has no option but to make a best judgment assessment by estimate. An assessment by estimate is as much legal as any other assessment. Once an assessment has been done, whether it is a best judgment assessment or otherwise the figure assessed must be held to be the income of the assessee. Such an assessment would not affect the levy of penalty." Thus, we find in this case that the Tribunal was not correct in holding that the Explanation does no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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