Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1982-83 - Assessee changed its method of accounting while filing its return of income for relevant assessment year - On assessment, Assessing Officer rejected new method of accounting and made various additions - As assessee did not offer explanation for additions, but agreed to inclusion of certain amount on account of freight collections received from sister concern and from other parties, Assessing Officer initiated penalty proceedings under section 271(1)(c) - Subsequently, assessee under Amnesty Scheme, objected to addition of certain amount and also offered its explanation - Benefit of said scheme was allowed in respect of additions objected to, but penalty proceedings was allowed to continue in respect of remaining additions made by Assessing Officer - Thereupon Assessing Officer holding that assessee failed to offer any explanation in respect of additions, levied penalty - On appeal, Commissioner by taking view that immunity under scheme should have been extended to freight collections from sister concern also, cancelled penalty so imposed - Tribunal affirmed view taken by Commissioner (Appeals) - Whether in order to ensure that assessee had offered proper explanation before assessing authorities which would satisfy clause (B) to Explanation 1 of section 271(1)(c), further examination of matter was necessary - Held, yes - Whether applicability of Amnesty Scheme in facts of case, and, circulars issued under scheme were also to be examined by Tribunal afresh - Held, yes - Whether, therefore, matter was to be remitted back to Tribunal for a de novo consideration - Held, yes FACTS The assessee was a registered firm engaged in the business of transportation of goods. It followed mercantile system of accounting up to the assessment year 1981-82. For and from the assessment year 1982-83, however, it changed its method of accounting to cash system in respect of receipts only and accounted for the expenditure on accrual basis. While completing the assessment, the Assessing Officer rejected the cash system of accounting adopted by the assessee in respect of its…

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