9911796707
TMI Blog1979 (8) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 and 1963-64 levied by the Inspecting Assistant Commissioner under section 271(1)(c) is sound in law ? " We may notice the material facts which gave rise to this question. The respondent-assessee is a registered firm. For the assessment years 1962-63 and 1963-64, corresponding to the accounting years ending with March 31, 1962, and March 31, 1963, respectively, assessments of the assessee-firm were completed under s. 143(3) read with s. 147 of the I.T. Act, 1961, on February 11, 1970. The assessee could not satisfactorily explain cash credits and finally offered for assessment sums of Rs. 25,000 each representing peak credits on hundies. The ITO added the same as the assessee's income from undisclosed sources for each of the two assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be the minimum imposable under law, by his order dated January 22, 1972. The IAC had based his penalty order on the acceptance of the assessee in respect of the addition of Rs. 25,000 as income from undisclosed sources. To the protest of the assessee's representative that the penalty sought to be levied was very heavy, it was mentioned that it was the minimum penalty leviable under law. Aggrieved by the levy of penalties by the IAC, the assessee preferred appeals to the Income-tax Appellate Tribunal. It filed an affidavit in support of its stand that cash credits representing the hundi loans were proved by the assessee by the production of the original discharged hundi khokas and later the addresses of the concerned creditors had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the minimum penalties. The Tribunal further found that a plain reading of the orders of penalty passed by the IAC indicates that they do not at all refer to or establish the ingredients of the offence with which the assessee is charged, namely, concealment of income. Relying upon the decision of the Supreme Court in CIT v. Anwar Ali [1970] 76 ITR 696, it was held that the case of the assessee is one of agreed addition of Rs. 25,000 for each of the assessment years in respect of unproved deposits and no culpable or wilful negligence on the part of the assessee was involved and, therefore, no penalties under s. 271(1)(c) of the Act are justified. In the result, the penalties levied by the IAC were cancelled holding that there was no jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fide impression that the penalty would be about Rs. 340 and Rs. 400, respectively, for the two assessment years, which turned out to be not correct. The minimum penalty imposable appears to be 100%, that is, Rs. 25,000, at that time on account of the amendment of s. 271(1), which came into force on April 1, 1968. The assessee's explanation has been accepted by the Tribunal. The finding of the Tribunal that the very consent given for the proposal in proceedings under s. 271(4A) cannot be said to be genuine and valid so as to subject the assessee to the imposition of minimum penalties is one of fact which is binding on this reference court. We are unable to agree with the counsel for the revenue that there is no material in support of the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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