COMMISSIONER OF INCOME TAX Vs. GAJRAJSINGH NATHUSINGH

JUDGEMENT

(1.) BY this application under Section 256(2) of the Income-tax Act, 1961 (for short, "the Act"), the applicant-Department seeks a direction to the Income-tax Appellate Tribunal, Indore Bench, Indore, to state the case and refer the undernoted three questions said to be of law for the opinion of this court arising out of its order dated June 27, 1991, passed in I. T. A. No. 460/Ind. of 1989 and its refusal to refer the case by order dated November 26, 1991, passed in R. A. No. 252/Ind. of 1991 :

(2.) THE assessment year involved is 1983-84. THE assessment in the case had been completed at a total income of Rs. 1,12,750 by an order dated March 6, 1986, under Section 143(3) of the Act. THE assessee had returned the income at Rs. 99,690 but the Assessing Officer made additions of Rs. 10,000 on account of certain undisclosed transactions of purchase and sale and of Rs. 2,563 on account of discrepancies in the matter of Bardana use by the assessee. THE assessment was not challenged by the non-applicant/assessee in appeal and as such the additions became final. Subsequently, the penalty proceedings were also initiated by the Assessing Officer under Section 271(1)(c) and were finalised after considering the assessee's reply and the penalty of Rs. 40,940 was imposed on him. Aggrieved by the said penalty, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) who, vide his order dated February 22, 1989, confirmed the penalty holding that there was deliberate concealment on the part of the assessee. THE assessee then filed an appeal before the Tribunal which vide its order dated June 27, 1991, set aside the order of penalty holding that the assessee would have well succeeded in getting the entire additions deleted but for his own omission of not filing any appeal against the assessment order. THE Tribunal further held that the order imposing penalty is unreasonable and vindictive in nature.

(3.) THE Tribunal, in allowing the appeal of the assessee, has obviously proceeded on the assumption that had the assessee filed an appeal against the assessment, the additions made by the Assessing Officer would have been deleted. We refrain from making any comments on the finding of the Tribunal as we propose to make a direction to the Tribunal to make the reference. We are, however, satisfied that the order of the Tribunal does give rise to a question of law stated at No. 1 by the Department. THE Department has, however, not pressed other questions (Nos. 2, and 3).