Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1980-81 - Certain additions were made in income of assessee by Assessing Officer - Assessee withdrew his appeal before Commissioner (Appeals), and accepted additions to purchase peace with department - Assessee, in penalty proceedings, explained that he had made a settlement with Commissioner by offering additions under Amnesty Scheme and prayed for dropping penalty action - Assessing Officer levied penalty brushing aside explanation offered by assessee on basis that case was not covered by Amnesty Scheme - Tribunal found that amount was surrendered as a part of settlement under Amnesty Scheme which assessee had preferred before Commissioner and held that there was no concealment of income on basis that Explanation 1 to section 271(1) was applicable to facts of case, though in notice for penalty no specific reference was made to said Explanation - Whether finding of Tribunal that there was no concealment of income was a finding of fact - Held, yes - Whether Tribunal was right in law in cancelling penalty levied - Held, yes FACTS The Assessing Officer completed assessment for the assessment year 1980-81 by making additions on account of lease rent, sundry cash credits, for insufficient drawings for personal expenses, unaccounted investment in jewellery and loan from Century Investment Corporation. He also initiated penalty proceedings under section 271(1)(c). The assessee withdrew his appeal before the Commissioner (Appeals) and accepted the additions to purchase peace with department. In connection with penalty, the assessee explained that he had come forward with a settlement with the Commissioner by offering the additions made in the assessment at his hand under the Amnesty Scheme and, therefore, prayed for dropping of penalty action. The Assessing Officer brushed aside the explanation offered by the assessee on the footing that the case was not covered by the Amnesty Scheme. He was of the view that the offer of the assessee of the cash credit aggregating to Rs. 1,50,000 for assessment at the assessment stage and withdrawal of the appeal relating to loan…

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