9911796707
TMI Blog1993 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976, this court directed the Tribunal to draw up a statement of the case and refer the following question for its opinion : "Whether, on the facts and in the circumstances of the case and having regard to the fact that the presumption arising under the Explanation to section 271(1)(c) of the Income-tax Act, 1961, arose against the assessee, the Tribunal was justified in cancelling the penalty imposed upon the assessee for the assessment year 1968-69 ?" The assessee is an individual and is a partner in two firms, Messrs. Agarwal Fabrications and Messrs. K. C. Agarwal and Sons. The assessment year is 1968-69 and the relevant previous year is the calendar year 1967. In his return originally filed on April 25, 1969, the assessee had declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not be imposed in respect of the addition of Rs. 26,050 made in the assessment proceedings. The assessee resisted the action of the Inspecting Assistant Commissioner, vide his letter dated February 27, 1974, of his chartered accountants, Messrs. Khandelwal Jain and Company. Overruling the objections raised by the assessee and keeping in view the fact that there was an amendment in section 271(1)(c) of the Act with effect from April 1, 1964, the Inspecting Assistant Commissioner imposed a penalty of Rs. 26,050, vide his order dated March 5, 1974. Thereafter, the assessee preferred an appeal before the Tribunal and argued that on a proper appreciation of the facts and circumstances obtaining in his case, the Inspecting Assistant Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sources. On the facts and circumstances of the case, therefore, we are satisfied that this is not a fit case for levy of penalty under section 271(1)(c). We would accordingly quash the order of the Inspecting Assistant Commissioner of Income-tax and direct the Income-tax Officer to refund the amount of penalty, if any, collected from the assessee. In the result, the appeal succeeds and is allowed. " In its application made under section 256(1) of the Act, the Revenue requested the Tribunal to draw up a statement of the case and refer the following question to this court : "Whether, on the facts and the circumstances of the case and having regard to the fact that the presumption arising under the Explanation to section 271(1)(c) of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2] 197 ITR 31, wherein also the court had an occasion to deal with a case after the insertion of the Explanation to section 271(1)(c) of the Act. He pointed out that in the said decision, the court has observed that the Tribunal had wrongly followed the ratio laid down in the case of Anwar Ali [1970] 76 ITR 696 (SC) instead of the ratio laid down by the Supreme Court in its subsequent decisions noted above. However, it may be mentioned that the court had also observed that the Tribunal did not have the benefit of these subsequent decisions of the Supreme Court. In this view of the matter, learned counsel for the Revenue submitted that the Tribunal ought to have confirmed the penalty imposed by the Inspecting Assistant Commissioner. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings under section 271(1)(c) of the Act. He, therefore, strongly urged that in the interest of justice, if need be, the question may be reframed. On due consideration of the submissions of the parties and the material available on record, we do not find any merit in the stand taken on behalf of the assessee. It is pertinent to note that when the Revenue made an application under section 256(1) of the Act, before the Tribunal, raising a question, no objection appears to have been taken by the assessee or perhaps the Tribunal might have indicated that they are going to reject the application. However, when the matter came up before this court under section 256(2) of the Act and when this court, after hearing both the parties, had directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section." On a proper reading of the aforesaid provisions in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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