S C MAGAVI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference sought by the assessee under section 256(1) of the INcome-tax Act, 1961, the first question before us is, whether in a proceeding commenced by a notice under section 34 of the INdian INcome-tax Act, 1922 (which will be referred to as the "old Act"), a penalty can be imposed under section 271 of the INcome-tax Act, 1961 (which will be called the "new Act"). The second question is whether in an appeal before it the INcome-tax Appellate Tribunal has the discretion to say that no penalty "should be levied at all" under section 271(1)(a) of the new Act.

(2.) THE material facts may be briefly stated :

(3.) IT is equally clear that the Tribunal intended in formulating the second question to ask us to decide whether it had discretion in a case falling within clauses (a) and (b) of section 271(1) to say that no penalty should at all be levied. But the second question refers to only clause (a) of section 271(1) and it is not disputed that the omission to allude to clause (b) is attributable to inadvertence.