COMMISSIONER OF INCOME TAX Vs. PARDEEP KUMAR

JUDGEMENT

(1.) BY this reference under section 256 (2) of the Income-tax Act, 1961 ("Act"), the Income-tax Appellate Tribunal, ("Tribunal") has referred the following question of law to this Court for opinion :

(2.) THIS reference is pending in this Court since 1985. The controversy pertains to the cancellation of penalty of Rs.9,000/- imposed under section 271 (1)(c) of the Act in respect of the assessment year 1970-71. The Tribunal deleted the penalty imposed by the Inspecting Assistant Commissioner under section 271 (1)(c) of the Act for the failure of the assessee to disclose in his original return for the assessment year 2970-71 commission of Rs.9,000/- receivable from one M/s Hari Talkies. THIS income of Rs.9,000/- was later shown in the revised return. The case of the assessee was that the commission income could not be shown in the original return because the accounts of M/s Hari Talkies from whom this commission was due were not reconciled. It was contended by the assessee that as the omission to disclose the commission income of Rs.9,000/- in the original return was inadvertent and not intentional, no penalty could be levied under section 271(1)(c ) of the Act. The Inspecting Assistant Commissioner did not accept the above contention of assessee and levied penalty of Rs.9000/- under section 271 (1)(c) of the Act. It is this penalty which was deleted by the Tribunal. The Tribunal arrived at a finding of fact that the omission was not intentional and, in that view of the matter, held that no penalty could be imposed. The Tribunal, therefore, deleted the penalty. The Tribunal also rejected the application of the revenue under section 256(1) of the Act for referring the question proposed by the revenue to this Court, as in its opinion, it was a question of fact. However, later it made the present reference on the direction of this Court under section 256(2) of the Act.

(3.) IN view of the above, the question referred to us is answered in the negative, i.e., in favour of the assessee and against the revenue.