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Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment years 1965-66 to 1967-68 - Whether where Tribunal taking an overall picture of matter decided not to impose penalty, no question of law arose from Tribunal's order - Held, yes FACTS The ITO did not accept the returned figures of income and made additions. The IAC imposed penalties under section 271(1)(c). On appeal, the Tribunal held that merely because the assessee's returned income could not be substantiated by contemporaneous evidence, it could not be said that the assessee's showing of lower income was due to her gross negligence. Even the estimate made by the revenue had been reduced in appeal by the Tribunal and, therefore, it could not be said that what income had been assessed by the ITO was correct income of the assessee. Taking the totality of evidence, the Tribunal came to the conclusion that the levy of penalty was unsustainable and, therefore, cancelled the same. On application under section 256(2). HELD The Tribunal taking on overall picture of the matter decided not to impose penalty. This question was one of fact and no question of law arose for determination of the Court. Note : The case was decided against the revenue. CASES REFERRED TO CIT v. Prafulla Kumar Mallik [1976] 104 ITR 648 (Orissa), CIT v. Sankarsons & Co. [1972] 85 ITR 627 (Ker.), D. Halappa Sons v.CIT [1974] 95 ITR 542 (Mys.) and Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211; [1972] 83 ITR 26 (SC). JUDGMENT R.N. Misra, J.-Under directions of this court made on an application under section 256(2) of the Income-tax Act, 1961, at the instance of the revenue, the Income-tax Appellate Tribunal, Cuttack Bench, has stated this case and referred the following question for opinion of the court: "Whether, on the facts and in the circumstances of the case, the learned Tribunal is justified in cancelling the penalties under section 271(1)(c) of the Income-tax Act ?" The assessee is an individual dealing in mill-made cloth. The relevant assessment years are 1965-66, 1966-67 and 1967-68. The Income-tax Officer did not accept the returned figures of income and made additions.…

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