BANARAS CHEMICAL FACTORY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 256(2) of the Income-tax Act, 1961.

(2.) THE Income-tax Appellate Tribunal, Allahabad Bench, has submitted the statement of the case and has referred the following question for the opinion of this court:

(3.) NOW, a penalty is leviable under Section 271(1)(c) of the Act, if an assessee conceals his income or furnishes inaccurate particulars thereof. Inasmuch as the assessee himself disclosed a concealed income of Rs. 6 lakhs, there can be no manner of doubt that the assessee was guilty of concealment and, as such, was liable to penalty. The only ground pressed before us by the learned counsel for the assessee is that the assessments having been made on an agreed basis on the voluntarily disclosed income by the assessee, no penalty was leviable. There is no merit in this contention. The law does not provide that if an assessee makes a voluntary disclosure of its concealed income he has to be absolved from penalty. It is of course a circumstance which can be taken into consideration by the income-tax authorities in determining the quantum of penalty. The Tribunal has, in fact, taken into consideration this fact and has reduced the penalty to the minimum imposable under the law. The other contention that the assessee had never agreed to the imposition of penalty has also no force. The imposition of penalty is not a matter of course but is levied in accordance with the statutory provisions contained in the Income-tax Act. That apart, the assessee did not state in his application that it was not liable to penalty or that no penalty should be imposed upon it as a matter of compromise. On the other hand, the assessee had stated that a nominal amount of penalty should be imposed or that the question of penalty should be left to be decided after the completion of the assessments. This request of the assessee is a clear admission of its liability to penalty. The penalty has been imposed after the assessments. The Tribunal having reduced the penalty to the minimum imposable under the Act, there was no further scope for any reduction. The assessee could not have been absolved from penalty because on its own admission it had rendered itself liable to penalty. The Tribunal, in these circumstances, could not allow any further relief to the assessee.