COMMISSIONER OF INCOME TAX Vs. SHASHI AGGARWAL

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, New Delhi, has referred the following question of law under Section 256(1) of the Income- tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that penalty under Section 271 (1) (c) of the Income-tax Act, 1961, could not be levied even if the assessee had not disclosed in their returns of income their agricultural income for the assessment year 1974-75 ?"

(2.) Briefly stated, the facts giving rise to the present reference are as follows :

(3.) A consolidated reference in respect of the three assessees, namely, Smt. Shashi Aggarwal, Master Manoj Narain and Sri K. N. Agarwal, has been made by the Tribunal, which relates to the assessment year 1974-75. All the three respondent-assessees own a farm, known as Prag Agricultural Farm, along with one Sri S. N. Agarwal. They were in receipt of their respective share of income from the farm as co-owners. In the return of income filed by them for the assessment year in question, they did not disclose their share of income from the said agricultural farm. It may be mentioned here that during the assessment year in question, agricultural income was includible in the total income for rate purposes, in view of the amendment made by the Finance Act, 1973. The Income-tax Officer initiated penalty proceeding under Section 271(1)(c) of the Act and levied penalties. However, in appeal, the Commissioner of Income-tax (Appeals) had deleted the penalty. The Revenue's appeals before the Tribunal have failed.