1989 (4) TMI 69

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....or imposing penalty under section 271 (1) (c) after April 1, 1976 ? 2. Whether, on the facts and in the circumstances of the case, the, Income-tax Appellate Tribunal was right in deleting the penalty of Rs. 78,216 imposed under section 271 (1) (c) ? " The Tribunal has also referred the following two questions at the instance of the assessee: "1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the penalty order was not invalid on the ground that the show-cause notice for imposition of penalty had been served on one ex partner and not on all the three partners separately ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that penalt....

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.... Incometax Officer ordered so or when the notice was issued by the Inspecting Assistant Commissioner after April 1, 1976. This controversy has been settled by a Full Bench of this court in CIT v. Mohinder Lal [1987] 168 ITR 101, wherein it is held that the forum to levy penalty depends on the date when proceedings for penalty are initiated and they stand initiated when the Income-tax Officer passes an order and not when the notice is issued by the Inspecting Assistant Commissioner. In this case, proceedings were initiated by the Income-tax Officer on September 9, 1975, and at that time, penalty could be levied by the Inspecting Assistant Commissioner and not by the Income-tax Officer, and, therefore, the levy of penalty by the Inspecting As....

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....ount books on the basis of which the return was filed. The assessment year is 1972-73 and the sales shown in the roznamcha are from July 16, 1971, to April 14, 1973, which include the period July 16, 1971, to March 31, 1972, with which we are concerned. On the basis of the roznamcha, 100 per cent. additions were made and on the basis of the additions the Income-tax Officer had come to the conclusion that the assessee had concealed his income and initiated proceedings for levy of penalty. The additions of 100 per cent. have been confirmed. The Tribunal upheld the penalty and did not agree with the assessee's contention that since additions were made on estimate basis of suppressed sales, penalty was not leviable. After the amendment in secti....