2005 (3) TMI 58

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....ing penalty when he has not sought instructions from the Commissioner about the revised return filed under the scheme admitting the addition and whether in such circumstances, the order imposing penalty by the Income-tax Officer is in accordance to law? 2. Whether, on the facts and circumstances of the case, the order passed by the hon'ble Tribunal confirming the minimum penalty on addition of Rs. 74,044 even when the return was under the scheme and is protected by Circular No. 451, dated February 17, 1986, is correct in law, when the merits of the said addition are not gone into either by the Commissioner of Income-tax (Appeals) or by the Tribunal to find out the scope of the circular?" In short, the question that arises for consider....

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....stored that of the Assessing Officer by imposing a minimum penalty of Rs. 56,000. It is against this decision of the Tribunal, the assessee felt aggrieved and prayed for reference to this court by taking recourse to the provisions of section 256(1) of the Act. The Tribunal acceded to the prayer so made by the assessee and accordingly, made the reference to this court on the questions referred to supra. Heard Shri S.C. Goyal, learned counsel for the applicant, and Shri R.L. Jain, learned senior counsel with Ku. V. Mandlik, learned counsel for the non-applicant. Having heard learned counsel for the parties and having perused the record of the case, we are inclined to answer the question against the assessee and in favour of the Revenue ....

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.... 451 has its application so too the case of the assessee falls in question No. 28 quoted supra. In other words, it is a case where the assessee first contested the addition in appeal, then withdrew the appeal and filed a revised return in relation to the addition which was made the subject-matter of appeal, as their income. In a case of this nature, the circular says that take a "lenient view" in imposing the penalty and not a harsh one. The Tribunal has rightly held that a lenient view has been taken by imposing the minimum penalty on the assessee. Placing reliance on the amnesty scheme as also on a decision rendered by this court in the case of Harkatwat and Co. v. CIT [2005] 273 ITR 84, learned counsel contended that the assessee is e....