Law: Income Tax Act, 1961

Section: 256,271,271

Income-tax--Reference--Penalty---Concealment of income---Finding by Tribunal that assessee was able to explain existence of cash found during search operations and that there was no concealment of income---Tribunal was justified in deleting penalty---No question of law arose---Indian Income Tax Act, 1961, Ss.256 & 271. Held, dismissing the application for reference, that the Tribunal had found that the assessee had been able to explain the cash found in a search in its business premises. The availability of cash was fully supported by entries of purchases and sales in the books of account. The Tribunal held that the Assessing Officer had not detected any concealment and merely because the assessee had surrendered the amount in the revised return, penalty could not, be levied. There was no specific challenge to the correctness of these findings arrived at by the Tribunal. The Tribunal was correct in cancelling the penalty. No question of law arose from its order. CIT v. Lal Chand Tirath Ram (1997) 225 ITR 675 (P & H) ref. THIS JUDGMENT DELIVERED BY: This is a petition under sector. 256(2) of the Income Tax Act, 1961 (for short "the Act'), seeking a direction to the Income-tax Appellate Tribunal, Delhi, to draw up a statement of the case and refer the following question for the opinion of this Court: "Whether, the Income-tax Appellate Tribunal was justified in law in upholding the order of the Commissioner of Income-tax (Appeals), cancelling the penalty under section 271(I)(c) at (of) Rs.4.29,520'"' The business premises of the assessee were searched on April 30, 1987, by the officers of the Directorate of Revenue Intelligence, which resulted in the recovery of cash amounting to Rs.6,36,000, which was seized. On requisition the amount was remitted to the Income-tax Department. During the course of assessment proceedings for the assessment year 1988-89, when the assessee was required to explain the source of the said cash, it was stated that the said cash, was the sale proceeds of cloth sold by the assessee between the period from March 16, 1987 to April 3, 1987: It was claimed that the sale was made out of the cloth purchased by the assessee from one…

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