COMMISSIONER OF INCOME TAX Vs. KRISHNA TRADING CO

JUDGEMENT

(1.) THIS appeal, at the instance of the Revenue, was admitted on the following substantial questions of law :

(2.) ON receipt of notice, the assessee appeared and both sides were heard.

(3.) THE assessee appealed. THE Commissioner of Income-tax (Appeals) took the view that there was no conscious concealment of income by the assessee and that Explanation 1 to Section 271(1)(c) of the Act was not applicable. THE Commissioner of Income-tax (Appeals) is not seen to have explained why Explanation 1 was not attracted. Thus, the Commissioner of Income-tax (Appeals) reversed the order of the Assessing Officer and cancelled the order levying penalty. THE Revenue went up in appeal before the Tribunal. THE Tribunal relied on the decision of this court in CIT v. India Sea Foods [1996] 218 ITR 629 [FB] and held that for imposition of penalty under Section 271(1)(c) of the Act, there should be a conscious concealment of income on the part of the assessee. THE Tribunal proceeded to say that even though the explanation offered by the assessee for allegedly selling liquor at a reduced price was found to be not satisfactory while completing the assessment and an addition was made, it could not be said that there was a conscious concealment on the part of the assessee proved in this case. THErefore, the Tribunal confirmed the decision of the Commissioner of Income-tax (Appeals). It is this decision of the Tribunal that is challenged before us in this further appeal filed under Section 260A of the Income-tax Act.