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TMI Blog1979 (2) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the assessment order the share of income was taken at Rs. 4,730 provisionally and it was subsequently substituted with the share determined on the assessment of the firm of Rs. 19,545 vide order dt. 29th Jan., 1974 under s. 155. The ITO considered the amount on which penalty was to be levied to be Rs. 19,545 and, therefore, he imposed the minimum penalty of Rs. 19,545 being equal to the amount of income concealed by the assessee. The AAC has dismissed the appeal of the assessee and hence this appeal. 2. We have considered the rival submissions. The assessee's counsel, Shri H.R. Jain, in the course of his arguments challenged the quantum of penalty levied at Rs. 19,545. He submitted that penalty, if at all, could be levied, with refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtent omission on the part of the assessee and not a case of concealment of the particulars of income or furnishing of inaccurate particulars of income which would attract the penal provisions of s. 271(1)(c). The Supreme Court in Hindustan Steel Ltd(1). has laid down memorable guidelines in the matter of imposition of penalty. It has been held by the Supreme Court penalty will not be visited merely because it is lawful to do so or for a mere venial breach of law. The circumstances in which the omission took place and the absence of mens rea were brought out by the assessee's counsel by inviting attention to the papers included in his paper book. It was submitted that the assessee had disclosed the share of profit in the firm. M/s. Desh Sew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry firm and the amounts realised were treated to be satisfactorily explained by the ITO. It was contended that, in these circumstances the affairs about the dissolution of the firm were clearly before the ITO and it also followed that ITO was in the know of assessee being a partner in that firm. These facts do go to show that no serious attempt at concealment could be made by the assessee and omission to disclose the share in the firm was caused by an inadvertent omission. After the receipt of the note containing the assessee's various explanations dt. 28th Sept., 1972, the ITO, on 13th Oct., 1972, issued a notice to the assessee that he had found that the assessee was also a partner in the firm, M/s. Desh Sewak Foundry, Batala up to 30th A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not declare the loss and further that the assessee approached the arbitrator again for the purpose of verification of his personal account maintained in the account books and to his surprise he was informed that the profit falling to the assessee's share amounted to Rs. 4,731. In the course of penalty proceedings also, the assessee filed a written explanation dt. 16th Jan., 1975 which was accompanied by a certificate dt. 10th Jan., 1975 given by the arbitrator Shri Roshan Lal confirming the fact that he had told the assessee that there was a loss in the firm in the asst. yr. 1970-71 and as such he could declare loss in his Income-tax receipt of the letter of the ITO dt. 13 Oct., 1972 that the assessee made enquiries from the arbitrator agai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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