TaxTMI 
TaxTMI 
1983 (5) TMI 61
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....s filed. As the penalty under dispute arise out of assessment proceedings, which travelled up to the Income Tax Appellate Tribunal, it will be of immense help in case facts pertaining to the assessment are summarised. 2. The assessee is a registered partnership firm which manufactures ceramic products at Nallore. On 13th April, 1971, the Central Excise Office effected a surprise raid in the factory premises and certain material was seized by the Central Excise Department. Projecting the irregularities on the basis of material seized, a show cause notice was issued to the assessee by the Central Excise Department. The allegation of the Central Excise Department was that as a result of said discrepancies, goods worth Rs. 3,71,251 were sold....
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....books on a figure of Rs. 1,12,000, enhanced the addition to the extent of Rs. 1,12,000 itself after giving an enhancement notice to the assessee. The cash credits amounting to Rs. 27,000 added by the ITO were also confirmed by the AAC. 4. When the assessee came before the Tribunal confirmed the finding of the ITO applying GP rate of 30% on total turnover of Rs. 5,04,266 constituted of Rs. 3,92,866 as per books of the assessee plus Rs. 1,12,000 held to be the turnover not reflected in the books. In other words, the addition of Rs. 57,644 was confirmed by the Tribunal and addition of Rs. 27,000 on account of income from undisclosed sources was deleted giving to the assessee the benefit of addition of Rs. 57,644 and earlier intangible addit....
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....ry, 1981 in a sum of Rs. 30,800 as for purpose of concealment he considered the sales outside the books at Rs. 1,12,000 but applied the GP rate of 27.5% as per earlier GP rate disclosed by the assessee; instead of 30% GP rate applied by the ITO and confirmed up to the stage of the Tribunal. 6. It will not be out of place to mention that with effect from 1st April 1976, there was change of law as per which the power to levy penalty was withdrawn from the IAC by amendment of s. 274. 7. The ld. counsel for the assessee after giving the above stated relevant datas first of all addressed us on the issue pertaining to jurisdiction. In support of his contention he relied on Special Bench decision in the case of Joseph John vs. ITO (1982) 8 T....
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....arding the merit, he submitted, addition is sustained upto the Tribunal's stage as a consequence of application of GP rate and it is nothing more than rejection of an application of GP rate. On the third facet of his ground he submitted that computation of penalty is equal to the income concealed at a figure of Rs. 30,800 by the IAC and should be reduced to Rs.9,100 which will be, according to the working or computation of the same as per law, when concealment, if at all any, occurred i.e., on the date when return was filed. 8. The ld. departmental representative, on the jurisdiction issue made available to us our own order u/s 260(1) passed in the case of M/s Rattan Chand Krishnan Lal, Ludhiana in ITA No. 750/Asr/76-77 dt. 17th Septembe....
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....AC was competent in law to impose penalty in view of the amended provisions of law which were effective from 1st April, 1976, the reference having been made on 6th August 1974, their Lordships rejected the assessee's reference on 29th November, 1979 on a preliminary hearing and in this regard the Tribunal while passing a consequential order u/s 260(1) as per directions of their Lordships in the said matter held as under: "4. The Hon'ble High Court has rejected the assessee's reference on 29th November 1979 on a preliminary hearing. It seems that in view of the judgement in the case of CIT vs. Raman Inds. (1980) 121 ITR 405 (P&H) the Hon'ble High Court has upheld the view of the Tribunal by holding that the IAC was competent in law to imp....
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....ning to burden in the following words: "Once the department has discharged that initial burden, it will be for the assessee to show that there was reasonable cause on his part in failing to furnish the return in time". 12. We have also a decision of Punjab & Haryana High Court in the case of Shiv Narain Khanna vs. CIT, Patiala (1977) 107 ITR 542 (P & H) pertaining to the question whether some additional evidence is required for levying of penalty and in that case, their lordships made the following observations on page 543 of the report: "....... All the authorities found that the transactions were false. Assessment and penalty were levied on that basis. The learned counsel for the applicant argued that there was no material justif....