TMI Blog1976 (12) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... n saying that it is a question of fact. It rejected the revenue's contention on a consideration of all the facts and circumstances of the case. It is against this refusal that I.T.C. No. 194 of 1976 is filed. I.T.C. No. 193 of 1976 raises the consequential question: "Whether, on the facts and in the circumstances of the case, the order of the Tribunal cancelling the penalty levied under section 271(1)(c) by the Inspecting Assistant Commissioner in the assessment year 1957-58 is sound in law?" The question arose in the following manner. The assessee claimed certain credits for the year 1957-58 and, on an assessment, the Income-tax Officer accepted them. Subsequently, some statements were made by some persons before the Bombay Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On mere receipt of this letter, the Income-tax Officer, Nellore, proposed to reassess and started those proceedings. The Tribunal found that actually the statements made by the two persons were not brought on record. It was also pointed out that the Tribunal wanted those statements to be produced but the department was not able to produce them. It was not known that the two persons categorically stated that they had not lent any money to the assessee. There was nothing to indicate that the two hundi creditors had denied having lent monies to the assessee specifically. The Tribunal further pointed out that there was no use relying on what the Bombay officer informed the Nellore officer. In the absence of the basic material, the Tribunal con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms sufficient basis for the Nellore officer to reopen the assessment. This contention of Sri Rama Rao does not commend itself to us. The basic precaution that the department should have taken was to have the statements recorded by the Bombay officer placed before the Income-tax Officer, Nellore. They were not brought on record at all. It is very unsafe to act on a mere letter when such statements or their true copies were not enclosed. Even when the Tribunal wanted them to be produced the department did not do it. It was not known whether the two persons have categorically stated that they had not lent any money. As the Tribunal has pointed out, a mere intimation of some statements recorded by the Bombay officer does not form a ground for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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