COMMISSIONER OF INCOME TAX Vs. JAORA OIL MILL

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the I.T. Act by the Income-tax Appellate Tribunal, Indore Bench, Indore, seeking our opinion on the following question arising out of its order dated 8th September, 1976:

(2.) THE assessee is an unregistered firm deriving income from the business of manufacture and sale of oil. For the assessment year 1968-69, it had returned a loss of Rs. 2 lakhs. THE ITO directed the assessee to produce its books of account, etc., but on its failure to do so, assessment proceedings were completed under Section 144 of the I.T. Act and the total income was computed at Rs. 50,000 as against the returned loss of Rs. 2 lakhs. Penalty proceedings under Section 271(1)(c) of the Act were initiated and the case was referred to the IAC for imposition of penalty.

(3.) CLAUSE (iii) of Section 271(1)(c) of the I.T. Act, as it was in force during the relevant assessment year, is reproduced below : CLAUSE (iii)