TaxTMI 
TaxTMI 
2005 (2) TMI 858
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....d 12-8.2007 for the assessment year 1985-1986 for consideration and opinion of this Court. The question of the law referred by the Tribunal is as under. "Whether on the facts and in the circumstances of the case. ITAT is right in cancelling the penalty under Sec. 271(1)(c) of the I.T. Act, 1961?" 2. The assessee is a registered firm carrying on business in manufacture and sale of power loom spares. For the assessment year 1985-1986, the Intelligence Wing of the Department had conducted proceedings under Sec.132 of the Act in the business premises of the assessee's sister concern, During search and seizure, the books of accounts maintained by the assessee had also been seized. While scrutinizing the seized documents, it was noticed tha....
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....11.1990 has deleted the levy of penalty on the ground that the assessee had accepted the addition of income to its return of income only to buy peace and also to give quietus to the possible litigation. 7. The revenue being aggrieved by the orders passed by the first appellate authority, had carried the matter in an appeal before the Income Tax Appellate Tribunal in ITA No.232/1991. The Tribunal after hearing the learned Counsels for the parties to the lis and being of the view that the acceptance of the assessee for the additions to be made in the return of income is only to buy peace and also to give quietus to the possible litigation, had proceeded to hold that the some cannot be construed as a concealment of income to attract Sec. 27....
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....ssessee in order to buy peace had accepted an addition of a sum of Rs. 7,21,250/- to the return of income filed for the assessment year 1985-1986. Since there was not proper explanation the assessing authority was justified in holdings that a sum of Rs. 7,21,250/- is a concealed income and therefore, the penalty provisions are attracted. In aid of his submissions, the leaned Counsel has relied upon the observations made by a Division Bench of this Court in the case of Commissioner of Income Tax Vs. K. P. Sampath Reddy - 197 ITR 232 and also the observations made by the Apex Court in the case of Union of India and Another Vs. Banwari Lal Agarwal - 238 ITR 461. 11.In Re. Commissioner of Income Tax Vs. K. P. Sampath Reddy - 197 ITR 232 to w....
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....f the Act. In aid of his submissions the learned Counsel has relied upon the observations made by the Madhya Pradesh High Court in the case of Commissioner of Income Tax Vs. Suresh Chandra Mittal - 241 ITR 124, which decision has been approved by the Apex Court in the case of Commissioner of Income Tax Vs. Suresh Chandra Mittal - 251 ITR 9. 14. In the case of Commissioner of Income Tax Vs. Suresh Chandra Mittal - 241 ITR 124, the Madhya Pradesh Court is of the view that, if for any reason, the assessee has offered to make appropriate additions in the return of income filed before the authorities, that concession made cannot be construed as concealment of income by the assessee and therefore, would not attract penalty provision under Sec.....
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....e, the Revenue was required to prove the means rea of quasi-criminal offence. But it was because of the view taken in this and other judgments that the Explanation to Section 271 was added. By reason of the addition of that Explanation, the view taken in this case can no longer be said to be applicable." 17. Keeping in view the fact situation and the case law cited by the learned Counsels for the parties to the lis before us, we have carefully perused the order passed by the assessing authority dated 30.3.1989 levying penalty under Sec. 271(1)(c) of the Act. It is an admitted fact that after the search and seizure in the sister concern of the assessee in the present case, the books of accounts maintained by the assessee had also been siz....