2005 (1) TMI 39

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..... S. Singhvi J.- In this appeal filed under section 260A of the Income-tax Act, 1961 (for short, "the Act"), the appellant has prayed for determination of the following question of law: "Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was justified in law in deleting the penalty under section 271(1)(c) amounting to Rs. 73,000 by holding that....

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....onsidering the reply of the respondent, the Assessing Officer, vide his order dated May 29, 1991, imposed penalty of Rs. 80,000. The appeal filed by the respondent was partly allowed by the Commissioner of Income-tax (Appeals), Faridabad (for short "the CIT(A)"), who reduced the total additions by Rs. 30,000 and directed the Assessing Officer to recompute the penalty. Feeling dissatisfied with ....

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....did not contain specific reference to Explanation 1 appended to that section is no longer res integra. In K. P. Madhusudhanan v. CIT [2001] 251 ITR 99 (SC), a three-Judge Bench of the Supreme Court overruled the judgments of the Bombay High Court in CIT v. P. M. Shah [1993] 203 ITR 792 and CIT v. Dharamchand L. Shah [1993] 204 ITR 462 approved the decision of the Kerala High Court in CIT v. K.P. M....

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.... 271 in the notice under section 271 is necessary before the provisions of the Explanation are applied." Earlier, a Division Bench of this court in Capital Cinema v. CIT [1989] 179 ITR 628, held that mere non-mentioning of Explanation 1 to section 271(1)(c) in the notice issued for imposition of penalty is not fatal to the order passed under that section. Therefore, the view expressed by this c....