1986 (6) TMI 62

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....T on 4th Aug., 1982 and the assessee agreed to be assessed on the income of Rs. 81,000 for two years i.e. for asst. yrs. 1980-81 and 1981-82 and at Rs. 19,000 for asst. yr. 1982-83. Accordingly, the assessee filed returns for three years on 12th Aug., 1982 showing the above income. The above returns were accepted by the ITO. The ITO also initiated proceeding under s. 271(1)(c) of the IT Act and levied penalties at the rates of 50 per cent of the tax sought to be evaded and computed the amounts of penalties imposable at Rs. 17,250, Rs. 15,813 and Rs. 660 respectively in the three years under appeal. These penalties, according to the ITO, were levied as per the directions given by the CIT vide his order No. BC. X/471/SP/1982-83 dt. 4th Aug., ....

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....lties imposed by the ITO. The assessee, according to the Departmental Representatives, was estopped by his Act and conduct from challenging the orders levying the agreed penalties. The ld. Departmental Representatives also argued that the assessee would not have filed the returns showing the agreed income if raid had not taken place on its premises and that income reflected in the books of account was much less than what was later on shown on agreed basis. Thus on the Act and conduct of the assessee, levy of penalties was justified. Shri V.H. Patil, on behalf of the assessee argued that the assessee never agreed to levy of penalty under s. 271(1)(c) of the IT Act for the three years under appeal. There were no returns when the agreement was....

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.... 271(1) was not applicable in this case. It is also not in dispute that the returns for the three years under appeal were filed by the assessee only on 12th Aug., 1982 and the income shown in those returns were accepted by the ITO. Now, when no concealment have been detected in the returns submitted by the assessee, question of imposing penalties under s. 271(1)(c) of the IT Act does not arise and the AAC was right in cancelling the penalties levied by the ITO. We also find force in the submission of Shri Patil that the assessee agreed to levy of penalty at 50 per cent of tax sought to be evaded for asst. yr. 1978-79 for which return stood filed by the assessee prior to the date of settlement and not for three years under appeal. This is em....