Law:

Section:

Section 271(1)(c) , read with section 256 of the Income-tax Act, 1961 - Penalty - For concealment of income - From certain circumstances, Tribunal inferred that assessee had surrendered a sum at persuasion of ITO and, accordingly deleted penalty imposed on assessee under section 271(1)(c) - Whether since there was circumstantial evidence which formed basis for said conclusion of Tribunal no reference was called for questioning Tribunal's order -Held, yes FACTS The Tribunal cancelled the penalty imposed on the assessee under section 271(1)(c). On reference: HELD The order of the Tribunal showed that from certain circumstances in the instant case, it inferred that the assessee had surrendered a sum of Rs. 7,000 at the persuasion of the ITO. It is well settled that the evidence may be direct or circumstantial. It was quite clear that there was circumstantial evidence which formed the basis for the conclusion of the Tribunal. Hence, question whether, the order of the Tribunal was not vitiated in law as it was either on assumptions not supported by evidence or on evidence which could not be used against the Department as no opportunity was given to it did not call for reference. The instant application was dismissed. Note: The reference case was decided against the revenue. JUDGMENT Chandrashekhar, J.-In this application under sub-s. (2) of s. 256 of the I.T. Act, 1961, the Revenue has sought for a direction to the Income-tax Appellate Tribunal (hereinafter…

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