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TMI Blog1987 (3) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... l has referred the following question : " Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the Appellate Assistant Commissioner was right in cancelling the penalty of Rs. 10,000 imposed under section 271(1)(c) of the Income-tax Act, 1961 ? " The assessee, M/s. Meerut Construction Company, Meerut, was a firm of contractors. A return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Department came to this court by means of an application under sub-section (2) of section 256 of the Income-tax Act. The application was allowed and the Income-tax Appellate Tribunal was directed to draw up a statement of the case and refer the question to the High Court for its opinion. The argument advanced on behalf of the Revenue was that as the total income returned was less than eig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was made on the basis of an estimate but that did not mean that penalty could not be levied if the assessee failed to prove that the difference between the income returned and the income assessed was not due to any fraud or wilful negligence on its part. In Addl. CIT v. Lakshmi Industries and Cold Storage Co. [1984] 146 ITR 492 (All), a Division Bench held that merely because the addition in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he effect of the Explanation to section 271, after amendment by the Finance Act, 1964, was that where the total income returned by any person was less than 80 per cent. of the total income assessed, the onus was on such person to prove that the failure to file the correct income did not arise from any fraud or any gross or wilful neglect on his part and unless he did so, he should be deemed to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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