JASBIR SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal has been preferred by the Assessee under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 20-1-2003 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 1091/Chd/1998 for the assessment year 1991-92, proposing following substantial question of law:

(2.) Facts necessary for adjudication as narrated in the appeal may be noticed. The Assessee filed his return on 3-9-1991 declaring an amount of Rs. 40,720. The search was conducted on 7-9-1993 under Section 132 of the Act on the premises of M/s Sarup Singh & Co. and group cases and notice under Section 148 of the Act was issued on 31-10-1995 for not disclosing the income from supply of milk to M/s Milk Foods Ltd., Bahadurgarh. In pursuance thereto, the Assessee filed return on 26-12-1995. The assessment was completed under Section 143(3) on 27-3-1997 determining the income at Rs. 2,21,985. In the absence of the tax audit report, the income from supply of milk was estimated by applying a GP rate of 0.5 per cent on the total sales of Rs. 3,45,27,248 (Rs. 3.45 crores) as the GP rate of 0.53 per cent was disclosed in the firm for the assessment year in question. Since the turnover exceeded Rs. 40 lacs, the Assessee was required to get its accounts audited and was directed to obtain its report before 31-10-1991. The said report was not filed with the return. The Assessee filed the audit report dated 8-6-1991 of H.R. Mittal & Co. during the course of reassessment proceedings. Accordingly, the assessing officer initiated penalty proceedings under Section 271B of the Act and imposed a penalty of Rs. 1 lac on account of failure of the Assessee in obtaining the report and furnishing the same with the return. Against the penalty, the Assessee filed an appeal. The Commissioner (Appeals) (in short "the CIT(A)") vide order dated 31-7-1998 allowed the appeal and deleted the penalty imposed by the assessing officer. Being aggrieved, the revenue went in appeal before the Tribunal, who vide order dated 20-1-2003 set aside the order of the Commissioner (Appeals) and restored that of the assessing officer which gives cause to the Assessee to approach this Court by way of instant appeal.

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