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TMI Blog1976 (4) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ing question for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the penalty levied upon the assessee in terms of the Explanation to section 271(1)(c) of the Act relating to the assessment year 1968-69?" The penalty related to the assessment year 1968-69. Return of Rs. 16,338 was filed by the assessee but was finalised at Rs. 29,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of gross and wilful neglect in not adding the salary paid to the partners in the returned income, penalty was exigible under section 271(1)(c) of the Act. In this view he imposed a penalty of Rs. 8,300. The Tribunal, on appeal, set aside the order of the Appellate Assistant Commissioner on the view that the Explanation to section 271(1)(c) was not applicable, as even though salary paid to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the Tribunal has found that there was no evidence on record that the partners to whom salary was paid were not working partners. There is also no finding that the amount of Rs. 8,000 shown in the books to have been paid to the partners as their salary was not in fact paid. Although for the purposes of computing the income, in view of the provisions of the Act, salary paid to a partner may not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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