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TMI Blog1975 (3) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... account of salary received from the Government. He also initiated proceedings under section 271(1)(c) of the Income-tax Act. As the minimum penalty imposable exceeded Rs. 1,000, he referred the matter to the Inspecting Assistant Commissioner of Income-tax under section 274(2) of the Act. The Inspecting Assistant Commissioner of Income-tax came to the conclusion that the Explanation to section 271(1)(c) was attracted as the income returned by the assessee was less than 80 per cent. of the income assessed. He levied a penalty of Rs. 26,000. It may be mentioned here that Balwant Singh after filing the return died and the assessment proceedings as also the penalty proceedings were continued against his legal representative, S. Devendra Singh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s referred the following two questions for the opinion of this court: " 1. Whether, on the facts and in the circumstances of the case, the provisions of section 271(1)(c) read with the Explanation thereto are attracted ? 2. Whether, on the facts and circumstances of the case, the Tribunal was legally correct in cancelling the penalty levied under section 271(1)(c) of the Income-tax Act, 1961 ? " As regards the first question, the same, in our opinion, is not happily worded. Whether section 271(1)(c) was attracted or not is the subject-matter of the second question. In the first question the Tribunal wanted only to refer the question whether the Explanation was applicable. The Tribunal held that the Explanation was not applicable because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that the salary realised by a Member of Parliament or a member of the Legislative Council was not to be assessed as income from salary but as income from vocation and the legitimate expenses incurred in carrying out that vocation had to be allowed as a deduction. In the instant case there was no material to show as to how much of this income the assessee had spent which could be allowed to him as deduction. In such circumstances, the Tribunal inferred that non-inclusion of the income from salary could not be said to be with a view to evading tax. It was merely an accidental omission. Now the findings recorded by the Tribunal that the assessee was not guilty of concealment is a finding of fact and based as it is on relevant circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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