1997 (11) TMI 45

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....s justified in cancelling the penalty levied under section 271(1)(c) for the assessment year 1960-61 especially when the assessment of the income of the Bombay firm in the hands of the assessee has not reached finality ?" The assessee, Lekhraj and Sons, is a firm carrying on business at Madras. The Income-tax Officer during the course of the assessment for the assessment year 1960-61 noticed that the purchases in Bombay were claimed to have been made through a firm styled Ramchand and Co., Bombay, while the assessee paid certain amount of commission and interest to this concern. The Income-tax Officer after going through the records held that there was no genuine partnership firm in Bombay and the business known as Ramchand and Co. was m....

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....rlier order in I.T.A. Nos. 825 and 826/Madras of 1973 dated December 3, 1975, affirmed the finding of the Appellate Assistant Commissioner. The Inspecting Assistant Commissioner to whom the penalty proceedings were referred, held that the provisions of section 271(1)(c) of the Act were attracted and imposed a penalty of Rs. 12,000 for the assessment year 1960-61 and Rs. 25,000 for the assessment year 1963-64 under the provisions of section 271(1)(c) of the Act. The assessee preferred appeals against the orders of penalty levied by the Inspecting Assistant Commissioner to the Income-tax Appellate Tribunal and the Income-tax Appellate Tribunal noticed its earlier order wherein it was held that the business of the Bombay firm cannot be h....

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....Revenue since the matter has been remitted by this court to the Appellate Tribunal to rehear the appeal with reference to the quantum appeals, the order of the Appellate Tribunal cancelling the penalty should be set aside and the matter should be remitted to the Appellate Tribunal to consider the matter again. Mr. S. A. Balasubramanian, learned counsel for assessee, on the other hand, submitted that this court has upheld the finding of the Appellate Tribunal that the Bombay firm is not a benami of the assessee-firm and, therefore, the Appellate Tribunal was justified in cancelling the penalty. We have heard the rival submissions of learned counsel for the Revenue as well as learned counsel for the assessee. The fact remains that this ....