Bona fide cheque dishonour defence defeated penalty where the Tribunal found no mala fide and revision was refused.

Penalty for issuing a cheque dishonoured for insufficiency of funds was found unwarranted where the assessee acted under a bona fide expectation of receiving funds, then promptly deposited the amount and paid interest after dishonour. The question whether the conduct was bona fide or mala fide was treated as one of fact, and the fiscal authority was required to exercise discretion after considering the assessee's explanation. As the Tribunal had examined the material and recorded a categorical finding of no mala fide, the penalty could not be sustained and the order did not call for interference in revision.

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Issues: Whether the assessee was liable to penalty for issuing a cheque that was dishonoured for insufficiency of funds, and whether the Tribunal's finding of absence of mala fide called for interference in revision.

Analysis: The assessee had issued the cheque under a bona fide expectation of receiving funds, and upon learning of dishonour, promptly deposited the amount and paid interest. The finding whether the conduct was bona fide or mala fide was one of fact. The fiscal authority, while imposing penalty, had to exercise discretion after considering the explanation offered by the assessee. The Tribunal had considered the material on record and recorded a categorical finding that there was no mala fide.

Conclusion: The assessee was not liable to penalty, and the Tribunal's order did not warrant interference in revision.

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