COMMISSIONER OF INCOME-TAX Vs. SURINDER SINGH

JUDGEMENT

(1.) THIS application has been made by the Commissioner of Income-tax, Jullundur, under Section 256 (2) of the Income-tax Act, 1961 (hereafter referred to as " the Act "), against the order dated June 7, 1976, of the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as " the Tribunal"), declining to state the case to the High Court, for directing the Tribunal to refer the following question of law to this court, which according to him, arises out of the Tribunal's order dated February 21, 1976 : " Whether, on the facts and in the circumstances of the case, the Tribunal is correct in cancelling the penalty of Rs. 1,76,000 levied under Section 271 (1) (c) of the Income-tax Act, 1961 ? "

(2.) THE facts giving rise to this application are not disputed and are as under: The Commissioner of Income-tax, Jullundur, made an application under Sub-section (1) of Section 256 of the Act to the Tribunal requesting it to draw up a statement of the case and to refer to the High Court the aforesaid question of law in case of Commissioner of Income-tax v. Surinder Singh, arising out of the Tribunal's order dated February 27, 1976, passed under Section 254 (1) of the Act in I. T. A. No. 237 (ASR) of 1975-76 (Assessment year 1971-72 ). The Tribunal, vide its order dated June 7, 1976, has declined to state the case to the High Court as in its opinion no question of law arose out of its order dated February 27, 1976.

(3.) AFTER the decision of the Tribunal, the Inspecting Assistant Commissioner took up the penalty proceedings under Section 271 (1) (c) of the Act, who, on the basis of the material and evidence brought on the record, came to the conclusion that in the case of all the three creditors, the evidence had been cooked up with a view to lend credibility to the assessee's story of loans having been taken from the various parties and that the amounts of the three loans in question represented the assessee's concealed income. He, therefore, imposed a penalty of Rs. 1,76,000 at the maximum rate of 200 per cent. of the concealed income : vide his order dated May 30, 1975.