1992 (3) TMI 140

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....The return of income was filed on 29-11-1983. During the course of assessment proceedings, the Assessing Officer found that the assessee had not incorporated certain expenses which had been incurred by the firm. The ITO worked out such unexplained expenses/investments at Rs. 1,46,156. These included advance to employees, miscellaneous expenses, expenses incurred by one partner Shri Shailendra Gupta, purchases of goods and profits thereon, expenses on sales-promotion, advances to various persons and miscellaneous expenses. The ITO treated this amount of Rs. 1,46,156 as assessee's income under section 69 of the IT Act, and imposed penalty under section 271(1)(c) which was confirmed by the learned CIT (Appeals). 2. It has been argued by Shri ....

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....32 and Mutual Plastics v. 12th ITO [1989] 80 CTR (Trib.)(Bom.) 45, photocopies of which have been filed before us to canvass that as per these decisions where the income assessed was loss and there was no prospect of any profit in near future, it could not be said that mistake was committed with guilty mind and that penalty under section 271(1)(c) could not be imposed. The Id. counsel argued that so far as the facts of the case were concerned, the Revenue had found these defects only from the documents which were with the Revenue and the assessee had also complied its books of account from that material which was in the possession of the Revenue and hence it could not be said that the assessee had made any attempt to conceal its income. Eve....

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.... v. CIT [1963] 50 ITR 1. 4. We have carefully considered the arguments advanced from both the sides. However, we are unable to agree with the Id. Departmental Representative in view of the fact that the entire judicial opinion as Cited by the Id. counsel for the assessee is against this Revenue. Thus in the case of Sudha Pharmaceutical (P.) Ltd., the Chandigarh Bench of the Tribunal has held that since penalty under section 271(1)(c) can be levied in addition to any tax payable by assessee, in a case where total income is assessed at a loss, no question of tax payable arises and no penalty under section 271(1)(c) is leviable. In the case of Shri Khedut Sahakari Khand Udyog Mandli Ltd. a similar view is taken. In the case of Mutual Plastics....