Law:

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Section 256, read with section 271(1)(c), of the Income-tax Act, 1961 - Reference - Question of fact - Whether when Tribunal found that assessee had entertained bona fide belief that amount in question was not required to be disclosed in return riled and that omission on assessee's part to include impugned income was not deliberate, then in view of those findings of fact, order of Tribunal setting aside penalty levied on assessee under section 271(1)(c) did not give rise to any question of law - Held, yes Facts Penalty proceedings were initiated under section 271(1)(c ) because the assessee had failed to include in her income the income of her two minor sons who had been admitted to the benefits of partnership in three firms from which the assessee had derived her income. The assessee contended that the share income was not earned by the minors in the relevant accounting year and, therefore, the income of the minors could not be clubbed with her income. The AAC rejected the assessee's contention and the penalty under section 271(1)(c) was levied. The Tribunal held that judging the entire conduct of the assessee, it could not be held that the omission of the assessee to include the income of her minor sons was deliberate so as to make her liable to pay the penalty, and, thus, set aside the order of penalty. On application under section 256(2) : Held In the present case, the Tribunal found that the assessee had entertained a bona fide belief that the amount in question was not required to be disclosed in the returns for the relevant assessment year. The Tribunal also held that in the circumstances of the case, the omission on the part of the assessee to include the income in question was not deliberate. Those were findings of fact and in view of those findings the order of the Tribunal setting aside the penalty levied on the assessee did not give rise to any question of law. Thus, the application seeking reference was rejected. R.C. Mukati for the Applicant. ORDER 1. Heard Shri Mukati, the learned counsel for the applicant, on the question of admission. 2. This is an application under section 256(2) of the Income-tax Act, 1961 ('the Act'). The material facts…

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