TMI Blog1990 (5) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The following two questions have been proposed in the application filed by the assessee : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in not cancelling the penalty order of the Income-tax Officer under section 271(1)(c) of the Income-tax Act, 1961, relating to the assessment year 1975-76 on the ground that the penalty orders were illegal and not according to law ? (2) Whether, in view of the fact that the Income-tax Officer had levied a penalty below the minimum limit and as such the order of the Income-tax Officer was illegal, the Tribunal was legally correct in not quashing the order ?" Briefly stated, the relevant facts are these: Against the returned income of Rs. 1,81 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplaint before the Tribunal. While completing the reassessment order, the Income-tax Officer had initiated penalty proceedings for concealment of income and, in due course, a penalty of Rs. 1,06,417 was imposed which was confirmed by the Income-tax Appellate Tribunal. On refusal of the Tribunal to state the case and the aforesaid questions, the assessee has approached this court. Having heard learned counsel for the assessee, we are not satisfied that any one of the two questions set out earlier are questions of law in respect of which the Tribunal should be called upon to submit a statement of the case to this court. The only defence put forward by the assessee in the penalty proceedings was that its account books were maintained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely assessed income was over two lakhs of rupees. In confirming the penalty order, the Tribunal remarked that it was possible that the assessee did not know as to what was the method adopted by the munim for manipulation of the books of account but the partners would nevertheless know the difference between the real income which had come to their pockets and the income that was being returned by the assessee-firm. It held further that the munim had done manipulation in the books of account with the consent and knowledge of the partners, for it was not the assessee's case that the accountant took away the concealed income by way of defalcation. Taking all the pros and cons of the case into account, the Income-tax Appellate Tribunal conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d off by the assessee firm on to the shoulders of the accountant who admittedly got not even a single penny out of the concealed income. The entire benefit of the concealed income was retained by the partners and they alone would have to bear the consequences of understating the income of the year in question. In any case, on a given set of facts, the question whether the Tribunal was justified in not cancelling the penalty, in our opinion, is essentially a question of fact and does not give rise to any question of law. Hence, question No. 1 does not call for a reference to this court. Now, coming to the second question, in our opinion, it must also meet the same fate, inasmuch, as it does not arise from the order of the Income-tax Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n directing that the penalty under section 271(1)(c) will be recomputed after final determination of income but the same will not exceed the quantum of penalty presently under appeal ?" On the quantum side, as noticed earlier, with reference to the addition of Rs. 24,626, the matter had been restored to the Income-tax Officer for fresh consideration and, consequently, in appeal relating to the penalty, the Tribunal gave the following directions : "After the concealed income is determined, the quantum of penalty may be redetermined in the light of such income ... Penalty will, however, in no case, exceed that presently under appeal". it is because of the above observations that the Revenue has come up in reference suggesting the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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