TMI Blog1973 (8) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... nch, has stated a case and referred under section 256(2) of the Income-tax Act, 1961, hereinafter called "the Act", the following question of law for the opinion of this court: "Whether, on the facts and circumstances of the case, the levy of penalty of Rs. 2,800 is justified?" Learned counsel on both sides submit that the correct question of law should read thus: "Whether, on the facts and circumstances of the case, the levy of penalty of Rs. 1,984 is justified in law?" The reference relates to the assessment year 1964-65. The relevant accounting year ended on 30th June, 1963. The assessee is a registered firm consisting of six partners carrying on business as provision merchants. It has a number of branches. The assessee returned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained an endorsement from the said representative which reads thus: "I concede to the minimum penalty. (Sd.) S. P. Ramaswamy, Chartered Accountant." The Inspecting Assistant Commissioner, Dharwar, passed an order imposing a penalty of Rs. 2,800. Against the said order, the assessee preferred an appeal before the Income-tax Appellate Tribunal, Madras Bench. Before the Appellate Tribunal, the same authorised representative, Sri Ramaswamy, represented the assessee. The Tribunal without considering the question whether or not there was concealment of income so as to attract penalty under section 271(1)(c) of the Act, substantially affirmed the order of the Inspecting Assistant Commissioner. This is what the Tribunal has stated in paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of account. It is also relevant to state that the assessing authority has stated that action under section 271(1)(c) is also initiated in view of the fact that the returned income is less than 80 per cent. of the assessed income. The Inspecting Assistant Commissioner who made the order of penalty has merely referred to the discussion in the order of the Income-tax Officer and he has not adduced any additional grounds for coming to the conclusion that penalty was called for. He had stated that "the Income-tax Officer has discussed in detail as to why he is forced to make the above-mendoned additions and he is also satisfied that the assessee not only concealed a part of its income from jaggery business but also comes under the mischief of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of its income. Sri S. R. Rajasekhara Murthy, learned counsel for the revenue, made a submission that we should remit the matter to the Tribunal to apply its mind afresh to find out as to whether penalty is arbitrary. We are not inclined to accede to that contention. As already stated, the Tribunal has entirely rested its decision on the alleged concession made by the assessee's authorised representative. No penalty can be imposed merely on the concession of an assessee or his representative unless the facts justify or warrant the levy of penalty. In the result, for the reasons stated above, we answer the question referred in the negative and against the department. The assessee is entitled to its costs. Advocate's fee, Rs. 250. Questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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