- (1.) Heard Sri Jaideep Narain Mathur, learned Senior Advocate assisted by Sri Mudit Agarwal Advocate and Sri D.D. Chopra, learned Counsel for the respondents. Perused record.
(2.) The appellant is a partnership Firm engaged in the business of buying raw honey and bee wax from persons who are traditionally engaged in extracting honey in the rural areas. The persons so engaged, are rustic persons and sell their honey to the appellant which is tested for quality. It is stated that the process to test quality of raw honey and bee wax, takes 2 to 3 months. Thereafter, the honey is graded and price is fixed. The persons, who leave honey with the appellant in raw form, are paid their dues after its quality testing by the appellant's Firm. It has been stated that suppliers of raw honey and bee wax are rustic persons and nomadic tribal people, who are known as Kanjars and Banjaras by castes. Ordinarily, these people do not have any specific place of their living. According to appellant's counsel, these people move from one place to another in search of raw honey and bee wax and after extracting it, they supply to the appellant's Firm. Their accounts are maintained and finally, the payment is made after ascertaining the quality of honey which they supply.
(3.) The present appeal under Section 260-A of the Income Tax Act, 1961 (In short the Act), has been preferred with regard to assessment year 1992-1993 against the imposition of penalty in pursuance of provisions contained under Section 271 of the Act. It has been stated that before the Assessing Officer, as many as 62 creditors (honey suppliers) were named in the records, who were finally paid their entire dues in the next financial year. During the course of the assessment, all the 62 persons failed to appear before the Assessing Officer. However, the Assessing Officer wanted the appellant to produce them to verify the genuineness of purchase, sale and maintenance of records of the creditors. As many as 12 such creditors were picked randomly by the assessing Officer and notices were issued to them under Sub-section (6) of Section 133 of the Act requiring their presence. It has been stated by the appellants counsel that out of 12 persons, 7 persons appeared before the Assessing Officer and 5 persons did not turn up. During the proceeding pending before the Assessing Officer, the appellant surrendered an amount of Rs. 1,00,000.00 in addition to the income return to the Income Tax Department on account of non-availability of the creditors.;