9911796707
TMI Blog1993 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the petitioner had not correctly posted all his receipts in the account books, an amount of Rs. 5,50,000 was added to the income returned. Details thereof are given in exhibit P-7. There was also an addition of Rs. 58,443.93 on account of alleged sales of rationed articles, which, according to the assessing authority, had not been effected by the petitioner on the dates mentioned. The order of assessment was followed by levy of penalty under section 271(1)(c) of the Act, which was taken in appeal before the Income tax Appellate Tribunal by I. T. A. No. 860/(Coch) of 1990. The Tribunal allowed the appeal and set aside the penalty. In the meanwhile, the petitioner had made an application to the Commissioner of Income-tax under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the petitioner was anxious to purchase peace and, therefore, agreed to the additions. There was also the fact that he had extended his co-operation to the Department in the matter of finalisation of the assessment. Paragraph 8 of the petitioner's letter dated December 15, 1979, and paragraph 3 of his other letter of even date clearly showed that the petitioner had agreed to the additions on the understanding that there will not be any penal action against him. True to his word, the petitioner did not appeal against the additions and accepted them. The Tribunal was, therefore, of the view that the additions made in the assessment were agreed additions and, in the circumstances, the levy of penalty was not legal. Even apart from this, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the proceedings at this stage will be premature. It was also mentioned that exhibit P-13 related to penalty proceedings and the findings therein were for purposes of considering the sustainability of the order of penalty and could not, therefore, be attracted in relation to the prosecution proceedings. The entire matter relating to prosecution for violation of the provisions of the Income-tax Act, 1961, was considered by Manoharan J. in Madras Spinners Ltd. v. Deputy CIT (Assessment) [1993] 203 ITR 282 ; [1993] 1 KLT 482. No doubt, that was a case where the order of assessment which formed the basis of the prosecution stood set aside and, in that context, the learned judge stated that, so long as the decision of the Tribunal was in for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rue, exhibit P-13 sets aside only the order of penalty and different considerations do arise in the matter of imposition of penalty. But the Tribunal, in its order, exhibit P-13, has conclusively held that the additions made in the order of assessment were on the basis of the agreement between the parties, which agreement was honoured by the petitioner by not filing an appeal against the order of assessment. The Tribunal, in the concluding portion of its order, exhibit P-13, has stated that both the petitioner and the Assessing Officer had acted on the understanding that it was an agreed assessment. This finding of the Tribunal, though in an appeal against the order of imposition of penalty, is wide in its terms. The Tribunal has also held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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