COMMISSIONER OF INCOME TAX Vs. H N MEHROTRA

JUDGEMENT

(1.) THIS is an application under S. 256(2) of the IT Act, 1961 ('the Act') by the CIT, Agra, requesting this Court to refer the Tribunal for referring following questions of law which arise out of the Tribunal's order dt. 9th April, 1992:

(2.) THIS fact is not disputed that the assessee is a private practitioner and derives income from his practice as well as from his an central agricultural landed property (HUF) and also from house rents from the asst. yrs. 1977-78 to 1980-81, 1984-85 and 1985-86. The assessment was made for the first time of subsequent years also and the petitioner has disclosed his income derived from different sources. The Tribunal by its impugned order dt. 9th April, 1992 contained in Annexure 3 to the petition, arrived at the finding that the petitioner has disclosed to the Department the income from all sources, and the Tribunal has reached positive finding to the effect that the petitioner has not concealed any income from any source from the AO and, thus, the explanation furnished by the assessee is substantiated and, therefore, no question of penalty within the meaning of s. 271(1)(c) of the Act arises.

(3.) THE learned counsel in support of his contention has relied upon Addl. CIT vs. Lakshmi Industries & Cold Storage Co. Ltd. (1983) 32 CTR (All) 195 : (1984) 146 ITR 492 (All) wherein their Lordships of this Court considered the Explanation to S. 271(1)(c) and held that the Tribunal's approach was erroneous in regard to the addition of Rs. 50,000 and that the Tribunal had not recorded any finding that the failure on the part of the assessee to return the same was not on account of any fraud or any gross or wilful neglect on its part. The assessee had also offered no explanation with regard to Rs.31,500 out of the sum of Rs.41,500 added on account of cash credits. The important feature of this case is that on the facts found, the inference of the Tribunal that these amounts had been added as the evidence had been found unsatisfactory, was not correct Penalty was exigible and the Tribunal was not justified in cancelling the penalty.