Rakesh Garg, J. - (1.)THE Revenue has filed the present appeal under Section 260A of the IT Act, 1961 (for short 'the Act'), against the order of the Income Tax Appellate Tribunal, Chandigarh, Bench 'A, Chandigarh (for short Tribunal'), dt. 25th April, 2007 (Annex. A -5) passed in IT(SS)A No. 130/Chandi/2005 in the case of Jai Parkash v. Asstt. CIT [reported at, (2008) 7 DTR 301 for the block period 1st April, 1986 to 2nd April, 1997, raising the following proposed substantial questions of law:
(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the penalty imposed under Section 158BFA(2) of the Act by ignoring its own finding that the income of Rs. 3,76,640 constituted undisclosed income within the meaning of Section 158BB(1)(ca) r/w Section 158BC(c) of the Act and that such undisclosed income attracted penal provisions under Section 158BFA(2).

(ii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deleting the penalty on the ground that the assessee still had time to file the return income under Section 139(4) and that it had paid entire advance tax ignoring the mandate of second proviso to Sub -section (2) of Section 158BFA of the Act.

(2.)A search and seizure under Section 132(1) of the Act had been carried out at the premises owned by the assessee/respondent on 2nd April, 1997 and upto the date of search, the assessee had not filed his return of income for the assessment year (for short 'A. Y'.) 1996 -97, which was otherwise due to be filed on or before 31st Oct., 1996. The return was filed on 17th Jan., 1997, therein declaring an income of Rs. 3,76,640. During the course of search, three savings bank accounts bearing Numbers 1499, 1760 and 1453 with Oriental Bank of Commerce, Anaj Mandi, Patiala, belonging to the assessee were detected, which were in the fictitious names of M/s Goyal Traders, M/s Shiv Traders and M/s National Engineering having deposits of Rs. 69,33,866, Rs. 57,15,604 and Rs. 54,72,439, respectively. The AO while completing block assessment under Section 158BC r/w Section 143(3) of the Act treated the income of Rs. 3,76,640 as an income from undisclosed sources in view of the specific provisions under Section 158BB(1)(ca) of the Act, though the same was declared by the assessee under Part III of his return of income filed under Section 158BC(a)(i) of the Act.
Simultaneously, penalty proceedings under Section 158BFA(2) r/w Section 158BC(c) of the Act were initiated vide order dt. 31st Dec, 1998. The appeal filed by the assessee against the order of the assessment was partly allowed vide order dt. 12th Nov., 1999. However, the findings of the AO pertaining to the addition of Rs. 3,76,640 shown as income by the appellant in his return filed on 17th. Jan., 1997 for the asst. yr. 1996 -97 were upheld by the CIT(A).

(3.)AGGRIEVED against the order of the CIT(A), the assessee filed further appeal before the Tribunal challenging the order of the AO, which was confirmed by the CIT(A) adding the income of Rs. 3,76,640 as an undisclosed income within the meaning of Section 158BB(1)(ca) on the ground that the assessee had not disclosed the same before the search operation carried out on 2nd Jan., 1997. The Tribunal vide its order dt. 15th Oct., 2004 dismissed the said appeal filed by the assessee.