TMI Blog1983 (3) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) If the answer to the above question is in the negative, whether the Tribunal was correct in holding that the quantum of penalty in this case was to be governed by the provisions of the law which were in force before April 1, 1968 ? " From the statement of case submitted, the relevant facts that appear are these. The assessee is a registered co-operative society manufacturing guns under licence from the Government. In the course of the assessment proceedings, the ITO found certain discrepancies between the balance in the Central Bank of India and the accounts of that bank in the books of the assessee. The balance as per books was Rs. 7,974 whereas the pass book showed a balance of Rs. 28,105. At the time of assessment, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IAC found that there was no explanation for the difference between the bank account as per pass book of the assessee and as per books maintained by the assessee. The IAC also referred to the fact that whereas the assessee showed sales of Rs. 6,380, the credit in the bank was to the extent of Rs. 1,81,000 which could very well represent the sales which had not been shown by the assessee. He, therefore, held that the assessee had concealed its income, and as such penalty had to be levied under s. 271(1)(c). In this case, the assessee has filed several returns and one of the revised returns was filed on July 12, 1969, and as this return had been filed after April l, 1968, the IAC held that the minimum penalty imposable was equal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's explanation had no basis at all, and, therefore, it further held that there was no fraud or gross or wilful neglect on the part of the assessee in this case. The Tribunal also held that there might have been certain defects in the maintenance of accounts and in making entries but there was nothing to show that there was any gross neglect in filing the return. The Tribunal, therefore, came to the conclusion that the penalty could not be imposed. The Tribunal further observed that the amended provision of law which had come into force from April 1, 1968, could be applied for the assessment year 1968-69 onwards and could not be applied to an earlier year merely because a return of income or the revised return had been filed after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, it could not be held that there was any fraud or gross or wilful neglect on the part of the assessee. ... " It will thus be seen that in so far as the addition of Rs. 20,000 is concerned, it is beyond any controversy. The only explanation that was submitted by the assessee, both at the stage of the AAC in the quantum appeal and before the Tribunal was that the said amount did not arise out of the sales made on behalf of the shareholders of the assessee, but it merely represented the commission which had been obtained by the assessee. We fail to see, how the commission earned by the assessee can be said not to be the income in the hands of the assessee. As a matter of fact, learned counsel appearing on behalf of the assessee fairly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in the negative and against the assessee, and hold that, on the facts and in the circumstances of the case, the Tribunal was not correct in holding that no penalty could be imposed in this case under s. 271(1)(c) read with its Explanation. We deliberately refrain from referring to certain decisions cited at the Bar with regard to the first question, namely, the case of CIT v. M. Habibullah [1982] 136 ITR 716 (All) relied upon by the senior standing counsel on behalf of the Revenue and also cases of CIT v. N. A. Mohamed Haneef [1972] 83 ITR 215 (SC), CIT v. Patna Timber Works [1977] 106 ITR 452 (Pat) and CIT v. Gopal Vastralaya [1980] 122 ITR 527 (Pat), because on the facts and in the circumstances as discussed above, none of these d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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