B.P.Jeevan Reddy, C.J. - (1.) Under Section 256(2) of the Income-tax Act, 1961, the Tribunal has stated the following question : "Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in knocking off the penalty solely on the ground that the income of the assessee had been made by estimate ?"
(2.) The assessee is a private medical practitioner of Bijnor. The assessment year concerned is 1970-71. He declared a total income of Rs. 6,381. The Income-tax Officer, however, estimated the income at Rs. 55,315. On appeal, the Appellate Assistant Commissioner reduced it to Rs. 34,815. On further appeal, the Tribunal reduced it to Rs. 16,815.
(3.) Meanwhile, proceedings for levying penalty were initiated under Section 271(1)(c) of the Income tax Act. The Inspecting Assistant Commissioner found that this is a case to which the Explanation to Section 271(1)(c) was attracted and that the assessee has failed to discharge the burden which lies upon him by virtue of the said Explanation. Accordingly, he evied penalty in a sum of Rs. 30,000. It may be noted that, by the date of the said order, the quantum appeal pending before the Tribunal was not disposed of.;