1988 (12) TMI 103

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....-VI, the following question of law has been referred to this court under section 256(1) of the Income-tax Act, 1961, for the assessment year 1965-66 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalty under section 271 (1)(c) of the Income-tax Act, 1961 ?" The facts leading to this reference are that the assessee is a registered....

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....ccount of deemed dividend had been deleted, the very basis of penalty under section 271(1)(c) ceased to exist. The penalty under section 271(1)(c) imposed by the Inspecting Assistant Commissioner was, therefore, cancelled and the appeal was allowed. We are of the view that inasmuch as the additions which were made in the assessment under section 147 of the Income-tax Act, 1961, had been deleted....