COMMISSIONER OF INCOME TAX Vs. R. KESAVAN NAIR

JUDGEMENT

(1.) CIT has come up with this appeal aggrieved by the order of the Tribunal, Cochin Bench in ITA No. 650/Coch/1995. Three questions of law have been raised for our consideration, which we have redrafted and consolidated as follows:

(2.) The AO however completed the assessment by assessment order dt. 31st March, 1993 and also initiated penalty proceedings under Section 271(1)(c) of the Act. Penalty proceedings were later completed by proceedings dt, 10th Sept., 1993 whereby penalty of Rs. 1,38,675 was imposed. Aggrieved by the same, assessee took up the matter in appeal before the CIT(A) and the appeal was dismissed holding that the assessee had deliberately concealed the details of income from liquor business and therefore levy of penalty was confirmed.

(3.) Assessee then took up the matter before the Tribunal, Placing reliance on the decision of the Madras High Court in CIT v. Adamkhan and also the decision of the Supreme Court in Sir Shadilal Sugar and General Mills Ltd. v. CIT . Tribunal took the view that there was no reason to initiate penalty proceedings and interfered with the penalty proceedings holding that in the absence of any reasonable ground penalty proceedings could not be initiated. Aggrieved by the same this appeal has been preferred by the Revenue.