INCOME TAX OFFICER Vs. BOMBAYWALA READYMADE STORES

JUDGEMENT

(1.) By way of this Tax Appeal, the only argument canvassed by learned Counsel for the appellant Mr. K.M. Parikh is that there is concealment of Income by the opponent. Learned Counsel has relied on the ground B. of the Memo of the Appeal which reads as under : -

(2.) W hile admitting the matter on 19.09.2005, the following question of law was framed : -

(3.) The facts which give rise to this Appeal are that during the course of search u/s. 132 of the Income Tax Act, on 31.08.1984 excess stock was found on physical verification as against the book stock worked out as on the date of search. The Assessee did not file the return of income for the A.Y. relevant to the F.Y. in which the search had been conducted. The assessing officer completed the assessment for the relevant assessment year on the basis of materials available with him. Penalty proceedings were initiated u/s. 271(1)(c) for concealing particulars of income. The assessee preferred appeal before the CIT(A) against the assessment order where the CIT(A) scaled down the income from Rs.5,52,572/ - to Rs.4,63,653/ -. During the penalty proceedings the assessee did not respond to the notice issued. The Assessing Officer levied a penalty of Rs.4,95,410/ - u/s. 271(1)(c) of the I.T. Act being 100% of the Tax sought to be evaded. The assessee preferred appeal before the CIT(A) against penalty so imposed. The CIT(A) deleted penalty on the ground that since the assessee is a regular assessee, explanation (3) to Section 271(1)(c) is not attracted. The concealment of income can be only with reference to return of income filed. In absence of any return filed, it cannot be held that assessee has concealed the particulars of income. It also held that since the income is assessed on estimate basis penalty for concealment of income is not leviable and hence, this Appeal.