TMI Blog1998 (9) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Income-tax Act amounting to Rs. 63,135 ?" The relevant facts may briefly be noticed. During the course of assessment proceedings, the assessee had made a claim for deduction of Rs. 91,500 as business loss in view of the confiscation of gold and other jewellery by the customs authorities. The claim was disallowed and the sum of Rs. 91,500 was added as income from undisclosed sources as the assessee could not explain the source of acquisition of gold and gold ornaments of that value. The assessee took up the matter up to the Income-tax Appellate Tribunal which also by its order dated November 22, 1990, dismissed the appeal. The assessee then moved an application under section 254(2) of the Act seeking rectification in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt on the following question of law : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the penalty imposed under section 271(1)(c) of the Income-tax Act amounting to Rs. 63,135 ?" By order dated July 31, 1995, the Tribunal has rejected the application forming an opinion that the addition to the income having been deleted, the Tribunal had no other option but to delete the penalty as well and, therefore, no referable question of law arose from the Tribunal's order dated February 21, 1995. The aggrieved Revenue has approached this court by filing this application under section 256(2) of the Act. It is submitted by Shri R. D. Jolly, learned senior standing counsel for the Revenue that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n being rejected under sub-section (1) of section 256 of the Act, under sub-section (2), the High Court may issue a mandamus to the Appellate Tribunal requiring it to state the case and to refer the question to the High Court on its being not satisfied with the correctness of the decisions of the Tribunal on the abovesaid two aspects. In this background let us test the order of the Tribunal rejecting the application under section 256(1) filed by the Revenue in the penalty proceedings. It is not disputed that so long as the addition is not sustained or the allowance of the deduction is upheld, till then the question of imposing penalty on the assessee by reference to section 271(1)(c) would not arise. The date on which the Tribunal passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he factum of pendency of reference in the High Court in quantum proceedings was brought to the notice of the Tribunal nor did the Revenue make a prayer to the Tribunal to await the decision of the High Court. Inasmuch as such a plea was not raised before the Tribunal, the same does not form part of the order of the Tribunal made in penalty proceedings. The question which is sought to be referred does not therefore arise as a question of law from the order of the Tribunal. Shri R. D. jolly, learned senior standing counsel for the Department relied on CIT v. Moti Lal Sharma [1995] 215 ITR 458 (Delhi), wherein a similar question was sought to be raised and was treated as a question of law arising from the order of the Tribunal and mandamus w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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