1976 (4) TMI 18

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..... P. SINGH J.-The Income-tax Appellate Tribunal, Delhi Bench, has referred the following question for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the penalty levied upon the assessee in terms of the Explanation to section 271(1)(c) of the Act relating to the assessment year 1968-69?" The penalty related to the assessment yea....

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....section 271(1)(c) applied, and as it was clearly established that the assessee was guilty of gross and wilful neglect in not adding the salary paid to the partners in the returned income, penalty was exigible under section 271(1)(c) of the Act. In this view he imposed a penalty of Rs. 8,300. The Tribunal, on appeal, set aside the order of the Appellate Assistant Commissioner on the view that the E....

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....cted even though it may have been disallowed by the Income-tax Officer. In the present case the Tribunal has found that there was no evidence on record that the partners to whom salary was paid were not working partners. There is also no finding that the amount of Rs. 8,000 shown in the books to have been paid to the partners as their salary was not in fact paid. Although for the purposes of compu....