Law:

Section:

Section 271(1)(c) , read with section 256 of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment years 1984-85 to 1987-88 - Pursuant to a search, assessee-firm filed its revised returns declaring additional income as estimated by search party - Assessing Officer accepted those returns in toto, but levied maximum penalty under section 271(1)(c) upon assessee - However, Commissioner (Appeals), as well as Tribunal set aside penalty on finding that search had merely led to undisclosed income and it would not have been possible for department to assess undisclosed income over all years without assessee's co-operation - On reference, High Court set aside order of Tribunal holding that findings recorded by Tribunal were perverse - Whether since question referred to High Court was not as to whether findings recorded by Tribunal on facts were perverse, High Court was precluded from entering into any discussion regarding perversity of findings of fact recorded by Tribunal - Held, yes - Whether on facts, penalty under section 271(1)(c ) was exigible - Held, no Section 256 of the Income-tax Act, 1961 - High Court, reference to - Assessment years 1984-85 to 1987-88 - Whether decision of Tribunal on facts can be gone into by High Court in reference jurisdiction only if a question has been referred to it which says that findings arrived at by Tribunal on facts are perverse, in sense that no reasonable person could have taken such a view - Held, yes FACTS During search conducted at the premises of the assessee-firm, certain incriminating documents were unearthed evidencing concealment of income by the assessee. The assessee filed its revised returns declaring such additional income as had been estimated by the search party. Though the income as per revised returns was accepted in toto, yet the Assessing Officer chose to levy the maximum penalty under section 271(1)(c) upon the assessee, repelling its contention that a promise was made not to levy the penalty. On appeal, the Commissioner (Appeals) set aside the penalty holding that since the assessee had offered the amount for taxation for purchasing peace, no case for levy of penalty was made out. On…

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