COMMISSIONER OF INCOME TAX Vs. RATANLAL SUREKHA

JUDGEMENT

(1.) In this reference under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1964-65, the following questions of law have been referred to this court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal had no evidence or had relied on irrelevant material for holding that the assessee had been able to rebut the presumption arising under the Explanation to Section 271(1)(c) of the Income-tax Act, 1961, that the assessee's failure to return the correct income arose either from fraud or from gross or wilful neglect on his part ?

(2.) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the order of penalty made under Section 271 (1)(c) of the Income-tax Act, 1961 ?"

(3.) The Inspecting Assistant Commissioner held that there was no merit in any of the contentions and ultimately levied a penalty of Rs. 1 lakh upon the assessee.