COMMISSIONER OF INCOME-TAX Vs. MEERUT CONSTRUCTION COMPANY

JUDGEMENT

(1.) As directed by the High Court in I. T. A. No. 1106 of 1976, the Income-tax Appellate Tribunal has referred the following question : "Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the Appellate Assistant Commissioner was right in cancelling the penalty of Rs. 10,000 imposed under Section 271(1)(c) of the Income-tax Act, 1961 ? "

(2.) The assessee, M/s. Meerut Construction Company, Meerut, was a firm of contractors. A return was filed declaring Rs. 12,826 as its income. The Income-tax Officer raised the income to Rs. 27,500 which was reduced in appeal to Rs. 22,000. As the returned income fell short of the assessed income by more than 20%, a penalty notice dated September 21, 1971, under Section 274 read with Section 271(1)(c) of the Income-tax Act was issued. The Income-tax Officer held that the petitioner wilfully concealed the particulars of his income and, therefore, levied a penalty of Rs. 10,000 under Section 271(1)(c) of the Income-tax Act.

(3.) Aggrieved, the assessee filed an appeal before the Appellate Assistant Commissioner of Income-tax. The appeal was allowed by order dated March 25, 1975. The second appeal preferred by the Revenue was dismissed by order dated July 24, 1975.