Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - During search, cash and jewellery were found - Assessee filed revised return by disclosing additional income - No explanation was offered by assessee expect asserting that he had disclosed income only to buy peace with department - Whether in circumstances of facts Tribunal was errored in setting aside penalty - Held, yes CASES REFERRED TO Sir Shadilal Sugar & General Mills Ltd. v. CIT [1987] 168 ITR 705/33 Taxman 460A (SC) [Para 3] and K.P. Madhusudhanan v. CIT[2001] 251 ITR 99/ 118 Taxman 324 (SC) [Para 4]. J. Narayanasamy for the Petitioner. V.S. Jayakumar for the Respondent. ORDER R. Jayasimha Babu, J. - The question referred for our consideration, at the instance of the Revenue is : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no penalty should be levied with reference to concealed income seized in the form of jewellery and cash following the ratio of the Supreme Court in the case of Sir Shadilal Sugar & General Mills Ltd. v. CIT [1987] 168 ITR 705, even after amendment to section 271 in 1964 and in 1975 ?" The assessment year is 1986-87. 2. There was a search in the assessee's shop and residence on 22nd Nov., 1985 at which time cash, jewellery and certain documents were seized. Thereafter, a revised return was filed by the assessee for this assessment year, which return was accepted and assessment made on the basis of that return. 3. The assessee in response to the notice seeking to impose penalty, took the stand that there was no concealment and it was only for the purpose of buying peace with the Department that the additional income was disclosed and the…

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