1980 (8) TMI 21

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.... the case, the Appellate Tribunal is right-in law in holding that though the case fell under the Explanation to section 271(1)(c) of the Income-tax Act, 1961, no penalty was leviable as additions to the income were made by the incometax authorities on estimate basis ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in holding that the Inspecting Assistant Commissioner had no jurisdiction to pass the penalty order in view of the amendments to section 271(1)(iii)/274 of the Act by the Taxation Laws Amendment Act, 1975 (Act XLI of 1975) ?" The brief facts of the case are that the assessee-company carries on the business of sanitary fittings and manufacture of tiles. It maintains separate tra....

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....It also observed that no concrete sale was pointed out by the ITO which had in fact been made by the assessee but had not accounted for. Towards the penultimate, part of this paragraph, the Tribunal observed as under: "The case of the assessee is that in the closing stock relating to the cement meant for sale to the public, there is no stock at all and the assessee itself having shown 326 bags in the closing stock relating to manufacturing of cement tiles, it cannot be said that any stock of cement meant for manufacturing of cement tiles was detected by the Income-tax Officer. The Inspecting Assistant Commissioner is, therefore, not, correct in observing that a case of definite suppression of sales and a case of sale of cement outside th....

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....come could be drawn. The case relied upon on behalf of the revenue is Addl. CIT v. Brij Nandan Prasad Deen Dayal [1979] 119 ITR 959 (All). In this connection, it has been submitted that the Allahabad High Court had departed from the earlier view taken by it in CIT v. Harmam Singh and Co. [1977] 106 ITR 532. In this case also, the Bench observed that action under s. 271(1)(c) of the Act could appropriately be taken in a case where an assessment is based on a best judgment assessment. However, the condition laid down was that even in that case the Tribunal should apply its mind to the facts and see whether it was a case of concealment, or furnishing of inaccurate particulars and if so, whether the assessee had been able to establish that the ....