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ORDER L. Narasimha Reddy, J. - Hyderabad Bench B of Income Tax Appellate Tribunal passed order dated 21.7.1998 in R.A.No.268/Hyd/97 (in ITA.No.466/Hyd/94), referring the following question for opinion of this Court, at the instance of the assessee. Whether on facts and circumstances of the case, the Tribunal was right in confirming levy of penalty under Section 271 (1)(c) of the Income Tax Act, 1961? 2. The applicant is an assessee under the Income Tax Act, 1961 (for brevity the Act). He filed returns for the assessment year 1983-84 disclosing income of Rs.27,165/- and it was processed by the Income Tax Officer, B-Ward, Circle-I, Hyderabad. A revised return was filed showing the income of Rs.28,980/-. The authorities of the Central Excise Department conducted a search at the shop as well as the residence of the applicant on 5.5.1982. Gold worth Rs.3,30,400/- and cash of Rs.2,20,000/- in Indian currency was seized. On receiving intimation about this, proceedings under the relevant provisions of the Act were initiated. The seized gold was confiscated under the provisions of the Central Excise Act. A sum of Rs.1,50,000/- was levied as penalty. The balance of Rs.70,000/- that was found during the course of search, was requisitioned in favour of the Income Tax Department. 3. Through an order of assessment dated 29.11.1985, the Income Tax Officer dealt with gold worth Rs.3,30,400/- and currency of Rs.2,20,000/-; and ultimately a sum of Rs.3,30,400/- was added to the income. In addition to that, notice under Section 271 (1)(c) of the Act was issued requiring the applicant to explain as to why penalty of Rs.3,30,400/- be not levied. The explanation submitted by the applicant was deemed to be not satisfactory. The assessing authority passed order dated 26.2.1991 imposing penalty. The appeal filed before the Commissioner was dismissed through order dated 10.11.1993. Thereupon the applicant filed ITA Nos.466 and 467 of 1994. The appeals were dismissed through order dated 24.6.1997. Thereafter, the reference is made, on an application filed by the applicant. 4. Sri Y. Ratnakar, learned counsel submits that the gold that was seized and confiscated by the Central Excise…

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