Law:

Section:

section 271(1)(c) [as it stood prior to 1-4-1976] of the income-tax act, 1961-penalty-for concealment of income-before ito started to investigate genuineness of cash credits in its books, assessee offered peak credit for assessment-ito accepted offer and made additions-lac levied penalty on this addition-whether tribunal was justified in deleting penalty on the ground that there was no evidence to show that peak credit represented assessee's concealed income-held, on facts, yes Facts During the assessment proceedings, the ITO found several cash credits in the assessee's books. Before he started investigations into their genuineness, the assessee offered the peak credit for assessment. The ITO accepted the same, and made the necessary addition while completing the assessment. The IAC levied penalty for concealment, relying upon the assessee's own conduct in offering the peak credit for assessment. The Tribunal deleted the impugned penalty, holding that there was no evidence to show that the peak credit really represented the assessee's concealed income. On reference: Held It was not suggested anywhere in the proceedings either of the ITO or of the IAC that while offering the peak credit for assessment, the assessee had confessed that the cash credits in question really represented concealed income. Again, none of the persons in whose names the cash credits appeared in the assessee's books were shown to have been examined by the ITO or even by the IAC for the purpose of making out a case against the assessee to the effect that they were not genuine loan transactions. In these circumstances, the ultimate finding of the Tribunal that the assessee had not concealed its income in respect of the cash was reasonable and the Tribunal was justified in cancelling the penalty. JUDGMENT BALASUBRAHMANYAN, J. - The assessee in this tax case is a registered partnership firm carrying on business in dhall and gram and deriving income therefrom. For the assessment year 1965-66, relevant to the previous year ended 31-3-1965, the assessee filed a return disclosing an income of Rs. 23,080. During the examination of accounts, which followed the filing of the return, the ITO found a…

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