Law: Income Tax Act, 1961

Section: 256,271,271(1)(c)

Income-tax-----Reference---Penalty---Concealment of income---Tribunal finding that surrender of cash credits for assessment was only because of inability to produce creditors and that there was no concealment of income---Tribunal justified in deleting penalty----No question of law arose---Indian Income Tax Act, 1961, Ss.256 & 271(1)(c). Held, dismissing the application for reference, that the Tribunal had found that the assessee had furnished confirmations from the cash creditors and it was only when the Assessing Officer wanted him to produce these creditors, including Y in whose case summons sent under section 131 of the Income Tax Act, 1961, were received back unserved, that the assessee found it expedient to surrender the amounts, but merely because the assessee had surrendered the amounts it did not follow that the amount agreed to be added represented its concealed income. The surrender so made also stood accepted and the Revenue had brought no material on record, besides the factum of surrender to show that the amounts involved represented undisclosed income of the assessee. The Tribunal was justified in cancelling the penalty No question of law arose from the order. CIT v. K.P. Sampath Reddy (1992) 197 ITR 232 (Kar.) ref. JUDGMENT The Commissioner of Income-tax has filed - this petition - under section 256(2) of the Income Tax Act, 1961 (for short "the Act"), seeking a direction to the Income-tax Appellate Tribunal to state the case and refer the following questions for the opinion of this Court: "(1) Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was correct in law in dismissing Department's appeal against the Commissioner of Income-tax (Appeals) order cancelling penalty of Rs.64,136 levied under section 271(1)(c) of the Income Tax Act, 1961? (2) Whether the Income-tax Appellate Tribunal is correct in facts and law in holding that the Revenue is not absolved from proving mens rea of quasi-criminal offence when the provisions of law as in force for the assessment year 1987-88 do not require the proving of any mens rea?" During the course of assessment proceedings for the assessment year 1987-88, the Assessing…

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