Law:

Section:

Section 256, read with section 271(1)(c), of the Income-tax Act, 1961 - Reference - Question of law - For assessment years 1969-70 and 1970-71 a penalty had been imposed on assessee under section 271(1)(c) - On appeal, Tribunal while accepting assessee's explanation relied on decision of Supreme Court in CIT v. Anwar Ali [1970] 76 ITR 696 and set aside said penalty order - Whether in view of fact that in a subsequent decision rendered by Full Bench of High Court in Vishwakarma Industries v. CIT [1982] 135 ITR 652 (Punj. & Har.). holding that decision in Anwar Ali's case (supra) was no longer relevant for construction of section 271(1)(c) as amended up-to-date, referable question of law arose from Tribunal's order - Held, yes Facts For the assessment years 1969-70 and 1970-71, the assessee had originally filed returns declaring certain loss. Subsequently, before the said assessment could be completed as a consequence of the search conducted at his premises, the assessee filed revised returns for the said years showing additional income. Therefore, after finalising the said assessment, penalty proceedings under section 271(1)(c) were initiated and a penalty was eventually levied on the assessee under section 271(1)(c) by the IAC. On appeal, the Tribunal, however, relied on two decisions, one in Basant Lal Om Parkash v. CIT [1972] 83 ITR 356 (Punj. & Har.) and the other of the Supreme Court in CIT v. Anwar Ali [1970] 76 ITR 696 for accepting the explanation offered by the assessee and, accordingly, set aside the penalty order. The Tribunal further refused to make reference under section 256(1). On reference under section 256(2) : Held A Full Bench of the High Court in Vishwakarma Industries v. CIT [1982] 135 ITR 652 (Punj. & Har.) clarified that the ratio of Anwar Ali's case (supra), which was based on the provisions of section 28(1)(c) of the 1922 Act, was no longer relevant for construction of section 271(1)(c ) as amended up-to-date. Thus, it to as clear, in the instant case, that a referable question of law did arise out of the Tribunal's order. Cases referred to Basant Lal Om Parkash v. CIT [1972] 83 ITR 356 (Punj. & Har.), CIT v. Anwar Ali…

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