COMMISSIONER OF INCOME TAX Vs. SUBHASH KUMAR JAIN

JUDGEMENT

(1.) This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 5-5-2003 passed by the Income Tax Appellate Tribunal, Chandigarh Bench B, Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 149/CHANDI/99 for the assessment year 1994-95, proposing following substantial question of law:

(2.) The facts for adjudication as narrated in the appeal may be noticed. The Assessee filed his return on 14-12-1984 declaring an income of Rs. 89,123. His assessment was framed under Section 143(3) of the Act vide order dated 18-4-1996 at an income of Rs. 10,80,213 after making an addition of Rs. 9,91,090 on account of agricultural income. As the Assessee failed to explain the agricultural income, enquiries were got conduct by the Inspector who submitted his report pointing out various defects in the documents furnished by the Assessee. Thereafter, the Assessee made an offer to surrender Rs. 9,91,090 subject to no penal action under Section 271(1)(c). Accordingly, the assessment was framed by the assessing officer. Commissioner of Income-tax (in short "the CIT") vide order dated 11-1-1999 in exercise of power under Section 263 of the Act set aside the assessment order holding that the same was erroneous and prejudicial to the interest of the revenue. The CIT directed the assessing officer to frame fresh assessment after taking into account the facts attracting penal action under Section 271(1)(c) of the Act. Feeling aggrieved, the matter was taken up in appeal by the Assessee and the Tribunal vide order dated 5-5-2003 set aside the order of the CIT holding that the CIT cannot direct the assessing officer to initiate penalty proceedings under Section 271(1)(c) as the same were not part or the assessment proceedings. Hence the present appeal by the revenue.

(3.) We have heard learned Counsel for the parties.