2008 (7) TMI 988

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....urt :- "Whether on the facts and in the circumstances of the case, the ITAT was right in law in deleting penalty imposed under section 271(1)(c), when addition made by the Assessing Officer has been upheld by the ITAT?" 2. The facts of the case are that the assessee was doing the business of commission agent and was a dealer in foodgrains, cotton and rice, etc. The assessee had earned certain commission in its commission agency business. Besides the commission earned in such business, profit of Rs. 1,26,963 was also earned in four transactions. Before the Assessing Officer, the assessee claimed that profit was passed on by it to those persons on whose behalf transactions had been done. The assessee did not include the said amoun....

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....iled appeal before the ITAT, who vide its order dated 20-7-1993 dismissed the appeal, while observing as under :- "We have considered the rival contentions and the decisions of various High Courts, referred to above, and we find that here in the case before us there is no question of any additional evidence required for the levy of penalty. What the assessee is claiming here is that the explanation given in respect of the disputed transactions must be examined in the light whether it was a bona fide one. Mere fact that it has been rejected by the Tribunal in quantum appeal, could not deter the Tribunal in any independent proceedings to find out if the explanation appeared to be genuine. Since the transactions were of a complex natu....

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..... We are, therefore, of the view that penalty proceedings being in the nature of quasi-criminal and penal, cannot be sustained. The order of the Tribunal in quantum appeal shall not indeed prejudice the penalty proceedings against the assessee." 6. Counsel for the revenue submitted that when the addition has been sustained in quantum of income, the penalty should also be held to be leviable because the assessee had been found to have deliberately concealed the income. 7. We do not find any force in the contention of learned counsel for the revenue. In the present case, a finding of fact has been recorded by the ITAT that the explanation given by the assessee in respect of the disputed transactions appears to be genuine and bona fid....