Law:

Section:

section 256, read with section 271(1)(c) of the income-tax act, 1961-reference-question of law-while levying penalty on assessee under section 271(1)(c) for assessment years 1967-68 to 1969-70 iac observed that assessee was returning income year after year on estimate basis and was accepting long additions and held that non-compliance with notice under section 143(2) and non-maintenance of acceptable accounts revealed a pattern and design on basis of which it could be held that assessee had concealed income or had furnished inaccurate particulars-iac had also taken into account certain additional evidence, i.e., that on 10-2-1974 when there was a raid and search of assessee's residence, certain amount was seized and that two creditors of assessee who were present at that time were found to be assessee's employees and they stated that they never had large sums to advance to assessee, as had been claimed by assessee-on appeal, tribunal, however, held that fact relating to raid had not been linked with relevant assessment years so as to materially affect complexion of cases and that on test of each addition of relevant assessment year it had to be held that assessee had discharged burden cast by explanation to section 271(1)(c )-whether in view of facts, (i) that there was a conflict of opinion between tribunal and iac as to whether aforesaid subsequent event could be taken into account as evidence for imposition of penalty, (ii) that even if amount seized in raid was assumed to be unexplained by virtue of section 69a, implication of section 69a had to be determined while dealing with question of taking into account amount found during raid, and (iii ) that tribunal had, on accepting that very explanation of assessee which was discarded in quantum appeal by tribunal itself, held that assessee had discharged burden that was cast on him under explanation to section 271(1)(c), any question of law arose from tribunal's order-held, on facts, yes. Facts The assessee had three sources of income: (i) liquor business, (ii) chemist shop, and (iii) property. The ITO, while passing the order of the assessment for the assessment years 1967-68 to 1969-70, was of the view that…

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