COMMISSIONER OF INCOME TAX Vs. CHELLADURAI R

JUDGEMENT

(1.) IN compliance with the directions of this Court in TCP No. 8 of 1973, the Tribunal has referred the following questions:

(2.) THERE was an application before the Tribunal by the ITO, who was the respondent in the appeal before the Tribunal. This application came to be filed under the following circumstances. The Tribunal, as stated earlier, followed certain decisions of the Mysore and Bombay High Courts. The Supreme Court dealt with the identical question of the leviability of penalty under the Act of 1961 in two decisions reported in Jain Brothers vs. Union of India (1970) 77 ITR 107 (SC) and CIT vs. Singh Engineering Works (P) Ltd. (1970) 78 ITR 90 (SC). It was pointed out to the Tribunal that the Supreme Court had held that penalty under the new Act could be levied as authorised by s. 297(2)(f) if the assessment was completed, as here, after 1st April, 1962, and that there was a patent error in the order of the Tribunal as it was contrary to this view of the Supreme Court.

(3.) THE tax sought to be evaded was Rs. 4,881 and 30% thereof would amount to Rs. 1,464 (approximately). This amount of penalty was retained by the Tribunal; the Tribunal, it may be seen, has not given any reason why it thought fit to reduce the penalty. The legality of the reduction by the Tribunal is now in issue.