SHYAM OIL MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an income-tax reference made by the Tribunal in FA No. 67/ind/1994 at the instance of assessee arising out of an appellate order dt. 17th March, 1994, passed in ITA 680/ind/1989 for the year 1982-83 to answer following questions of law :

(2.) IN short, the question that arises for consideration in this reference is, whether AO was justified in imposing a minimum penalty of Rs. 56,000 on the assessee due to non-disclosure of their true income amounting to Rs. 76,040 under Section 271 (1) (c) of the Act. Since the addition of Rs. 10,000 was accepted by the AO to be not justified and the same having been also accepted by the Tribunal, it does not survive for examination.

(3.) IT is not in dispute that against the said addition made by AO, the assessee filed an appeal to CIT (A) and later withdrew it and filed revised return offering the addition of Rs. 74,044 to be their income from undisclosed source. It is on the basis of this, i. e. , withdrawal of appeal and filing of revised return, the assessee contended that now no penalty be levied on the assessee for the alleged non-disclosure. In other words, the contention of assessee was that since they have filed their revised return, consequent upon withdrawal of appeal and giving up the challenge to the addition made, they be extended the benefit of amnesty scheme by not imposing any penalty on them under Section 271 (1) (c) of the Act. It is this contention, which did not find favour to AO, but found acceptance to CIT (A ). However, in an appeal filed by CIT, the Tribunal reversed the decision of CIT (A) and restored that of AO by imposing a minimum penalty of Rs. 56,000. It is against this decision of Tribunal, the assessee felt aggrieved prayed for reference to this Court by taking recourse to the provisions of Section 256 (1) of the Act. The Tribunal acceded to the prayer so made by the assessee and accordingly, made the reference to this Court on the questions referred supra.