1997 (7) TMI 22

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....he Appellate Tribunal was right in law in cancelling the penalty of Rs.4,40,185 levied under section 271(1)(c) of the Income-tax Act Assessment year 1988-89: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the penalty of Rs.4,85,336 levied under section 271(1)(c) of the Income-tax Act?" The assessee is a registered firm carrying on business as a wholesale dealer in engineering cutting tools. For the assessment year 1986-87, originally the return was filed on March 24, 1987, showing an income of Rs.2,21,575. The assessment was completed on November 26, 1987, on a total income of Rs.12,41,700. Subsequently when the assessment for the assessment year 1987-88 was taken ....

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....d the imposition of penalty. Before the Tribunal on appeal, the assessee contended that there was mistake in the total in the ledger and the mistake when discovered had been made good by the assessee by filing the revised return. There were bona fides on the part of the assessee in producing all the books before the Income-tax Officer and the Department had also accepted the fact that the interest charged under section 215 had been waived. The accountant who was in charge of the accounts died on February 17, 1986, and, therefore the assessee was not in a position to explain how the mistake actually occurred. It was submitted that for the assessment year 1987-88 in which the mistake was actually detected, the penalty proceedings were drop....