TMI Blog1981 (9) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was made out of the gifts and donations received by him from his mother's sister. The ITO did not accept the assessee's explanation and held that such investment represented the assessee's income from undisclosed sources. The ITO also initiated penalty proceedings against the assessee and levied penalty of Rs. 24,000 and Rs. 35,000 for the assessment years 1969-70 and 1970-71 respectively. The penalty levied on the assessee for the year 1970-71 was eventually set aside by the Income-tax Appellate Tribunal, by its order dated April 29, 1978, in I.T.A. No. 92 (Ind) 77-78. The Tribunal held that the assessee came forward voluntarily offering the income for tax and it was a case where his explanation in respect of certain investment had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1969-70. This application has been registered as Miscellaneous Civil Case No. 110 of 1980. As common questions arise in these applications they are being disposed of by this order. The questions of law proposed by the Department in Misc. Civil Case No. 81 of 1979 are as follows: " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the penalty of Rs. 35,000 levied by the IAC under section 27l(1)(c) of the Income-tax Act, 1961 ? (2) Whether the finding of the Tribunal that there was no fraud or gross or wilful neglect on the part of the assessee can be reasonably arrived at even on the material considered by it ? " The questions proposed by the Revenue in Misc. Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho was the mother's sister of the assessee, showing that gifts and donations were made by the Maharani of Indore to the assessee from time to time, was not considered while imposing penalty on the assessee. The Tribunal also observed that the assessee voluntarily offered the income for assessment. The Tribunal further considered that the AAC, throughout the body of the order, treated the assessee as a defaulter and did not invoke the Explanation to s. 271(1)(c) of the Act. The Tribunal also held that even if the Explanation was invoked, there was nothing to indicate that the assessee committed fraud or gross or wilful neglect in returning the income. On these findings, the Tribunal set aside the order imposing penalty on the assessee. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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