Law:

Section:

Income Tax---Penalty--Concealment--Income-tax Appellate Tribunal recording a finding of fact that there was no mens rea--Record showed that assessee was not conscious of the fact that he had concealed income--Penalty, held was not justified in circumstances. C I T v. Ashoka Marketing Ltd. (1976) 137 I T R 543; Addl-C.I.T. v. Kishan Singh Chand (1977) 100 I T R 534; C.I.T. v. Anwar Ali (1970) 76 I T R 696; Saeed Ahmad v., IAC (1971) 79 I T R 28; Addl. C.LT. v. Horilal Kung Behari Lal (1977) 106 I T R 720; Anantharam Veerasinghaiah & Co. v. C.I.T. (19830) 123 I T R 457; C.I.T. v. Net Ram Swarup [1973) 88 I T R 213 ; C.I.T. v. C.V.C. Mining Company (1976) 102 I T R 830 and C.I.T. v. Ashoka Marketing Ltd. (1976) 103 ITR 543 ref. JUDGMENT DR. R.R.MISRA, J.--The. Income-Tax Appellate Tramount Allahabad Bench, Allahabad, has referred, the following question of law for the opinion of this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in canceling the penalty of Rs. 16,500 imposed by the Inspecting Assistant Commissioner under Section 271 (1) (c)?" The assessee is a Hindu undivided family. For the-assessment year 196465, it derived income from business in foodgrains, cement and cloth. It had filed a return of income of Rs.17,122. The Income Tax Officer completed the assessment under Section 143 (3) of the Income Tax Act; 1961, hereinafter referred to as "the Act" Subsequently, however, the Income. Tax Officer received information that the assessee had received various bank drafts in the names of its employees and one member of the Hindu undivided family, namely, Sri Ram amounting to Rs.1, 07, 733 and did not record the- transaction in question in. its account books. Consequently, he issued notice under Section 148 of the Act for the assessment year 1964-65. In response to this notice, the assessee filed a return showing the same income of Rs.17,122 as originally returned by it. The contention of the assessee before the income Tax Officer was that the amount received by the employees of the Hindu undivided family and one of members in fact, belonged to Sri Ram, in his individual capacity, and the said amount did…

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