1990 (11) TMI 14

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....961, the Tribunal was justified in cancelling the order of penalty made by the Inspecting Assistant Commissioner ?" Shortly stated, the facts are that the assessee filed a return of its total income for the said year on January 7, 1965, declaring an assessable income of Rs. 1,07,703. The Income-tax Officer completed the assessment of the assessee for the said year on a total income of Rs. 2,42,371. In making the said assessment, the Income-tax Officer made, inter alia, an addition of Rs. 60,000 to the business income by rejecting the trading results of Vizianagaram and Barbin Branches. The Income-tax Officer found that the gross profit shown in respect of these two branches were very low and details of various expenses were not available....

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....re, levied a penalty of Rs. 45,000 under section 271(1)(c) read with section 274(2) of the said Act. The Official Receiver, High Court, filed an appeal against the said order to the Income-tax Appellate Tribunal. Nobody appeared before the Tribunal on behalf of the assessee. The Tribunal, following the decision of the Supreme Court in Anwar Ali's case [1970] 76 ITR 696, the decision of the Kerala High Court in CIT v. Sankarsons and Co. [1972] 85 ITR 627, and that of the Punjab and Haryana High Court in Addl. CIT v. Karnail Singh V. Kaleran [1974] 94 ITR 505, cancelled the penalty levied by the Inspecting Assistant Commissioner. At the hearing before us, learned counsel appearing for the Revenue drew our attention to the Full Bench decisi....