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[2007] 292 ITR 160 (BOM.) HIGH COURT OF BOMBAY Commissioner of Income-tax v. Vinodkumar Maheshwari J.P. DEVADHAR AND B. P. DHARMADHIKARI, JJ. IT APPLICATION NOS. 92, 96, 103, 109 OF 1994 AND 33, 49, 51 AND 52 OF 1995 APRIL 10, 2007 Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income â–  Where Tribunal had deleted penalty, not on merits but only on ground that quantum additions had been deleted, since section 256(2) application filed by revenue against order of Tribunal deleting quantum addition had been allowed, reference application under section 256(2) against deletion of penalty was to be allowed [Assessment years 1984-85 & 1985-86] The Tribunal had deleted the penalty, not on merits but only on the ground that the quantum additions had been deleted. However, section 256(2) application filed by the revenue against the order of the Tribunal deleting the quantum addition had been allowed. Held that the High Court had no option but to call for a statement of the case. Thus, reference application under section 256(2) against deletion of penalty was to be allowed. JUDGMENT J.P. Devadhar, J - Al l these applications filed by the Revenue under section 256(2) of the Income-tax Act, 1961 relating to the assessment years 1984-85 and 1985-86 were admitted on the questions of law set out in the respective applications. The respondents (hereinafter referred to as "the assessee") were partners of M/s. Nav Bharat Press, Nagpur. On dissolution of the said firm amounts credited to the capital accounts in the respective assessment year were claimed by the assessee as capital in nature. The Assessing Officer rejected the claim of the assessee by holding that the receipts were revenue receipts and taxable under section 176(3A) of the Act. Accordingly, the assessment orders were passed and penalties were levied under section 271(1)(c) of the Act. On appeal filed by the assessee, the Commissioner of Income-tax (Appeals) deleted the penalty by holding that there was no concealment of income. Against the said order, the Revenue filed appeals before the Income-tax Appellate Tribunal. The Tribunal by the impugned order without considering the…

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