CIT KANPUR Vs. SHADI RAM GANGA PRASAD

JUDGEMENT

(1.) WE have heard Sri R.K.Upadhyaya, learned senior standing counsel for the Revenue and Sri R.S.Agarwal, learned counsel for the respondent.

(2.) AT the instance of the Revenue the Income Tax Appellate Tribunal has referred the following question of law under Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for opinion of this Court:

(3.) THE brief facts of the case are that on the basis of a paper found during the course of a search conducted in the case of the assessee, an addition of Rs. 2,00,000/ - was made on account of unexplained investment for the assessment year 1981 -82. Interest of Rs. 12,754/ - was also included in the total income of the assessee and in the context of this addition a penalty of Rs. 12,620/ - was imposed under Section 271(1)(c) of the Act. Aggrieved with the above penalty order, the assessee preferred an appeal before the C.I.T.(A) who deleted the penalty on the premise that the addition, which formed the basis of the penalty was deleted by the Tribunal vide order dated 14.1.1991 rendered in I.T.A. No. 661 (Alld.) of 19887 The Department preferred a second appeal before the Tribunal, who dismissed the appeal on the ground that the addition, on the basis of which the penalty was imposed, was deleted by the Tribunal and there remains no basis of levy of penalty.