TaxTMI 
TaxTMI 
1981 (9) TMI 2
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....nder section 256(2) of the Income-tax Act, 1961, in pursuance of a direction of this court, the following are the questions that were directed to be, and have been, referred "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the penalty imposed under the provisions of section 271 (1) (c) for the assessment year 1961-62, when th....
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....ssee's explanation was that it had borrowed moneys from the said bankers by executing hundis. There were also entries in the books showing payment of interest of Rs. 81,040. During the course of the assessment, the assessee contended before the Income-tax Officer that there was a firm called Rambilas Nandlal, the partners of which had a controlling interest in the assessee-company. The said firm h....
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....ate Assistant Commissioner and succeeded as the latter had accepted a similar claim of the assessee for the assessment year 1961-62. The Department filed an appeal before the Tribunal. The Tribunal set aside the assessment as regards the addition of the amount covered by the credit entries and also the disallowance of the interest income. The Inspecting Assistant Commissioner levied penalties i....
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....e penalty proceedings should survive, the assessment proceedings should be alive. As the assessment had been set aside, the penalty proceedings could not have been terminated by the cancellation of penalty. The question as to whether penalty was leviable or not has to be considered in the light of the findings in the assessment to be made as a result of directions given by the Tribunal while setti....