COMMISSIONER OF INCOME TAX Vs. DHILLON RICE MILLS

JUDGEMENT

(1.) IN this petition filed under Section 256(2) of the INcome-tax Act, 1961 (for short, "the Act"), the petitioner has prayed for directing the INcome-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, "the Tribunal"), to refer the following question of law for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the INcome-tax Appellate Tribunal was right in law in confirming the order of the Commissioner of INcome-tax (Appeals) deleting the penalty levied under Section 271(l)(c) of the Act ?"

(2.) THE assessee is running a rice sheller. For the assessment year 1988-89, it filed a return of income declaring a net loss of Rs. 26,566. THE Assessing Officer did not accept the return and made the assessment by making addition of Rs. 2,85,253. He also initiated penalty proceedings under Section 271(l)(c) of the Act and imposed penalty of Rs. 90,000. THE appeal filed against the order of assessment was partly allowed by the Commissioner of Income-tax (Appeals), Bhatinda (for short, "the CIT (Appeals)"), who deleted the additions to the tune of Rs. 81,254. THE appeal filed by the assessee against the order of penalty was accepted by the Commissioner of Income-tax (Appeals) with the observation that the Department has failed to prove positive act of concealment on the part of the assessee. THE Tribunal has upheld the appellate order with the following observations :