COMMISSIONER OF INCOME TAX Vs. GUMLA TRADERS

JUDGEMENT

(1.) AT the instance of the Revenue, on an application filed under S. 256(2) of the INCOME TAX ACT, 1961 (the Act'), the Tribunal, Patna Bench, has referred to this Court the following question of law for its decision, which pertains to the asst. year 1972 -73:

(2.) IN the quantum appeal, it was found that there was deposit in the books of the assessee for a sum of Rs. 34,000 in the name of one Shri Mahesh Prasad. The ITO added this amount in the income of the assessee treating the same to be unexplained. The AAC on appeal by the assessee accepted the genuine character of Rs. 15,000 out of this amount as having been deposited by said Mahesh Prasad, but confirmed the addition of the balance amount of Rs. 19,000. This order of the AAC, was upheld by the Tribunal. Thereafter, the ITO instituted the proceedings for levying penalty under S. 271(1)(c) of the Act, on the basis of the addition of the amount of Rs. 19,000 and imposed the penalty of Rs. 19,270 on the assessee. This penalty was confirmed in appeal by the assessee by the AAC. But on further appeal by the assessee, the Tribunal deleted the penalty so imposed. In deleting the penalty the Tribunal, it appears, relied on a decision of this Court in the case of CIT vs. Chotangpur Glass Works (1984) 39 CTR (Pat) 97 : (1984) 145 ITR 225 (Pat) : 17 Taxman 356.

(3.) UNDER S. 271(1)(c), if the IT authority is satisfied that if a person has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay the penalty on the sum which shall not be less than one, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished.