COMMISSIONER OF INCOME TAX Vs. CENTRAL STORES
HIGH COURT OF KERALA
COMMISSIONER OF INCOME TAX
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G. Sivarajan J. -
(1.) THE Commissioner of Income Tax, Trivandrum, has filed this appeal against the order of the Income Tax Appellate Tribunal, Cochin Bench, in I. T. A. No. 737/Cochin of 1995, dated December 20, 1999, affirming the order of the Commissioner of Income Tax (Appeals), sustaining the penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, for short "the Act".
(2.) WHILE admitting the appeal, notice was ordered on the following questions of law :
"1. Whether, on the facts and in the circumstances of the case, does Circular No. 451 dated February 17, 1986 (No. 19) (see,  158 ITR 135), relied on by the assessee and the Tribunal contemplate categoric detection of concealment prior to the filing of the return ?
2. Whether, on the facts and in the circumstances of the case, and when the circular speaks of 'If the Income Tax Officer has already found material to show that there has been concealment, that would mean the Department has detected the concealment . . ', the Tribunal is right in the light of the material seized in holding 'according to the answer given to question No. 19 of the Central Board of Direct Taxes Circular No. 451 (see,  158 ITR 135, the Assessing Officer had only prima facie belief about the concealment and the concealment had not been detected categorically prior to the filing of the return by the assessee on April 23, 1986' and is not the finding wrong, inconsistent and militating against the circular ?
Whether, on the facts and in the circumstances of the case and in view of the knowledge/awareness of the Officer as to the contents of the materials seized including the contents of a slip of paper marked '11' containing details of the adjustments made in the accounts to understate the income while filing the returns, the Tribunal is right in law and fact in holding that concealment had not been detected and accordingly cancelling the penalty ?
(3.) WHETHER , on the facts and in the circumstances of the case and in the light of the findings noted at the beginning of the penalty order that documents were seized, such seized documents revealed suppression of income, etc., the knowledge the Officer had about the contents of the slip of paper marked '11' along with the facts of filing of the revised return within two weeks of the seizure and the principles laid down in CIT v. : 149ITR737(Ker) , the Tribunal is right in law and facts in cancelling the penalty ?;
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