COMMISSIONER OF INCOME TAX AND THE ASST. COMMISSIONER OF INCOME TAX Vs. A.B. KAGE AND CO., EXCISE CONTRACTOR

JUDGEMENT

(1.) THIS appeal is filed by the Revenue tinder Section 260A of the Income Tax Act aggrieved by the orders passed by the Income Tax Appellate Tribunal, Panaji, in ITA No. 817/Bang/1954 dated 7.8.2002, raising the following substantial question of law. Whether the Tribunal was correct in deleting the penalty levied under Section 271(1)(c) of the Act without the assessee discharging the burden under the explanation which would entitle such a deletion by merely holding that the subsequent admission revised return and the co -operative attitude of the assessee was sufficient to delete the penalty?

(2.) IT is not in dispute that the assessee in question - the respondent before us came into existence under a deed of partnership in the year 1986. The assesses was carrying on business of selling and supplying of arrack and the return of income came to be filed on 5.10.1998 for the assessment year 1988 -89 declaring a total income of Rs. 87,380 -. A search came to be conducted between the 9th and 10th oct. 198 in the residential premises of one of the partners of the assessee firm and several incriminating materials said to have come to light during the said search. During the course of search itself on 10.10.88 they said to have made a declaration disclosing the details of the income which was not declared in the returns of income filed on 5.10.88 and he also came forward to pay the tax payable m the undisclosed income by filing a revised return on 21.8.89.

(3.) READING the entire explanation 5 having reference Clause (sic) (2) the respondent assessee has declared undisclosed income while making a statement on 10.10.1988 and he has not disclosed the said income in his returns filed on 05.10.1988. Having regard to the sub -explanation (2) whatever was required has been complied with by the assessee. Therefore, he was entitled for the immunity so far as payment of penalty contemplated under that section. The appellate Tribunal simply referring to the immunity provided under explanation 5 of Section 271(1)(c) has given immunity to the assesses by deleting the 100% penalty of tax levied and we do not find any illegality in the said opinion of the Tribunal.