- (1.) Under Section 256(2) of the Income-tax Act, 1961, the following question has been stated by the Income-tax Appellate Tribunal, Allahabad Bench: "Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in cancelling the penalty of Rs. 15,000 imposed by the Inspecting Assistant Commissioner under Section 271(1)(c) read with its Explanation ?"
(2.) For the assessment year 1968-69, the assessee filed a return disclosing a turnover of Rs. 53,696 whereupon he showed a gross profit of 5%. Certain slight additions were made to the income so disclosed. There was also an addition of Rs. 7,300 as profit under Section 41(2) of the Income-tax Act. Though this transaction was not disclosed in the return, the assessee filed a revised return disclosing the said item, after the very first hearing and before the assessment was completed. The Income-tax Officer determined his income at Rs. 20,070.
(3.) Proceedings were then taken under Section 271(1)(c) for levying penalty. The Inspecting Assistant Commissioner levied a penalty of Rs. 15,000 which, in appeal, the Tribunal deleted.;