TMI Blog1982 (4) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the penalty levied by the Inspecting Assistant Commissioner of Incometax under section 271(1)(c) read with the Explanation thereto ? " The reference relates to the assessment year 1966-67. The assessee ran a cold storage and ice factory at Moradabad. For the assessment year 1966-67 it filed its return on December 26, 1970, declaring a loss of Rs. 51,942. It was mentioned in the return that it was a duplicate return. According to the ITO there was no such previous return on record and it was only after the service of a notice under s. 142 on September 1, 1970, when the assessee was called upon to produce its account books on September 15, 1970, that the appellant filed the return on December 26, 1970. Even after the filing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t books from scrutiny by the I.T. authorities. However, for that default, action could be taken under s. 271(1)(b) of the Act. As for action under s. 271(l)(c) no specific finding had been given of concealment nor any adverse comment had been made by the I.T. authorities at the assessment stage and taking into consideration the fact that the additions had been made in the trading account merely on the basis of an estimate and there was scope for error in good faith, penalty could not be levied. The Tribunal took note of the decisions of this court in Addl. CIT v. Swatantra Confectionery Works [1976] 104 ITR 291 and CIT v. Kedar Nath Ram Nath [1977] 106 ITR 172, but taking into account the totality of the circumstances of the case, it felt i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less than but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished. Explanation.-Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced to Rs. 6,700 by the Appellate Tribunal, there was thus a scope open for error in good faith and it is difficult to categorically hold that there was a conscious concealment of income. We do not agree with the reasoning given by the Tribunal. The assessee had given a written explanation before the IAC. That explanation was that the return had been filed on the basis of the account books maintained by it and that the ITO had not pointed out any concealment and had determined the income on the basis of an estimate only and no penalty could be levied in respect of such an estimate. The assessee did not produce the account books during the assessment proceedings and thus could not justify its assertion that the return of income was on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be levied shall be " in addition to any tax payable by him ". In the present case the income as finally determined after the Tribunal's order was below the minimum taxable limit. In other words, there was no tax payable by the assessee and , therefore, no penalty could be levied on the assessee. We are afraid we cannot go into this question because it is beyond the scope of the two questions referred to this court. However, it shall be open to the assessee to urge this question before the Appellate Tribunal when the case goes back to it for passing an order in conformity with our answers to the questions referred to this court. In the result we answer both the questions in the negative, in favour of the department and against the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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