COMMISSIONER OF INCOME TAX Vs. S PADMANABHAN

JUDGEMENT

(1.) AT the instance of the Revenue by reference under Section 256 (1) of the Income-tax Act, 1961 (for short hereinafter referred to as "the Act"), the Tribunal has referred the following substantial question of law for opinion of this Court. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that levy of penalty under Section 271 (1) (c) is unjustified ?

(2.) THE brief facts which give rise to this question are as under:

(3.) SRI M. V. Seshachala, learned Counsel appearing for the Revenue, contends that, in the light of the aforesaid undisputed facts, the Tribunal was not justified in recording a finding that the assessee under a bona fide the returns and that there is no concealment on his part and that it is not a wilful neglect. The said finding is contrary to law and liable to be quashed and the approach of the Tribunal is not correct. In this connection he brought to our attention explanation 1 to Clause (iii) of Section 271 (1) of the Act and contended that when the assessee is not able to substantiate the explanation offered and fails to prove that such an explanation is bona fide then the authorities are justified in imposing the penalty.