COMMISSIONER OF INCOME TAX Vs. PURUSHOTTAMDAS

JUDGEMENT

(1.) THIS is an application under Section 256(2) of the Income-tax Act, 1961, at the instance of the Revenue for calling for a statement of case from the Tribunal on the following question of law :

(2.) THE assessees' premises were searched on January 21, 1976, and on the basis of seized material, assessments for the assessment years 1967-68 to 1976-77 were completed. THE assessees concealed unexplained investments. THE Assessing Officer imposed penalty under Section 271(1)(c) of the Act. Aggrieved by this penalty, the assessees filed an appeal before the Commissioner of Income-tax (Appeals) who confirmed the order of the Assessing Officer. Hence, the assessees approached the Tribunal and the Tribunal after considering the matter allowed the appeal of the assessees and set aside the penalty. While disposing of the appeal, the Tribunal observed that in order to justify levy of penalty, there has to be some material or circumstances leading to the reasonable conclusion that the amount represented the income of the assessee of the particular assessment year. It was also observed that there cannot be levy of penalty as a matter of course. Accordingly, the Tribunal set aside the penalty for all the ten assessment years.