Amnesty relief and penalty cancellation require reconsideration where search operations were carried out at the assessee's premises.

The Bombay HC noted that penalty cancellation under section 271(1)(c) and the Tribunal's view on amnesty relief both required further consideration on the stated facts. It recorded that the amnesty circular excludes benefit where the assessee's premises were searched, and that search operations had been carried out at the assessee's business premises. The Court therefore did not decide the merits of whether the penalties were rightly cancelled or whether the amnesty scheme applied; instead, it allowed the applications and directed the Tribunal to forward a statement of case for determination of the two questions of law.

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Outcome: The income-tax applications were allowed and the Tribunal's deletion of penalty under section 271(1)(c) was held to require consideration in view of the search conducted at the assessee's business premises.

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