PT LASHKARI RAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Tribunal, Allahabad, has referred the following question of law under Section 256(1) of the IT Act, 1961, hereinafter referred to as the Act for opinion to this Court :

(2.) Briefly stated the facts giving rise to the present reference are as follows : The assessee filed on 23rd Aug., 1977, a return showing income of Rs. 33, 310/- which include Rs. 28, 068/- as profit under Section 41(2) of the Act on the sale of truck No. UPL 9030. After receipt of the return the ITO made a note 'investment in new truck No. UTY 355 to be looked into' on the return and issued notice dt. 4th March, 1980, under Section 143(2) r/w Section 142(1) of the Act requiring the assessee to produce account books and bank pass books, etc. on the 17th March, 1980. That day i.e., the 17th March, 1980, the assessee appeared before the ITO and filed a revised return showing an income of Rs. 53, 310/- instead of Rs. 33, 310/- as disclosed in the original return. The increase of Rs. 20, 000/- in the revised return was accounted for as the profit under Section 41(2) of the Act on the sale of truck No. UPL 9030 which was Rs. 48, 068/- and not Rs. 28, 068/- as shown in the original return. Originally, the sale price was disclosed .Rs. 35, 000/- and subsequently it was shown Rs. 55, 000/-. The assessment was framed on the same day by the ITO under Section 143(3) of the Act. Tax was computed, interest was charged under Sections 217 and 139(8) of the Act and penalty proceeding was also instituted and penalty was imposed. The assessee thereafter filed an application before the CIT, Allahabad, under Section 273A of the Act for waiver of penalty and interest. That application led the CIT to hold an inquiry. The CIT called for the reports of the ITO on the said application. Another comprehensive report was called by the CIT in the same connection from the ITO. The CIT eventually rejected the application of the assessee under Section 273A of the Act on 15th Oct., 1981. However, from the said record of assessment, the CIT noticed the following :

(3.) We have heard Sri Vikram Gulati, learned counsel for the applicant, and Sri A.N. Mahajan, learned standing counsel, who appears for the Revenue.