- (1.) The present appeal has been filed under s. 260A of the IT Act, 1961 (hereinafter referred to as 'the Act') and it relates to the asst. yr. 1993-94. The appeal arises out of penalty proceedings under s. 271 (1)(c) of the Act. The following questions of law are involved in the appeal: 1. Whether upon the facts and circumstances of the case, the Tribunal was justified in holding that the revised return filed by the assessee, surrendering the amount of Rs. one lac which was due to totalling mistake committed by the accountant, was a case of concealment of particular of income ? 2. Whether upon the facts and circumstances of the case, the Tribunal was Justified in holding that the surrender of Rs. one lac by the assessee to be added to its income as extra profit by filing revised return was not bonafide and was not to purchase peace and avoid litigation ? 3. Whether upon the facts and circumstances of the case, the Department had discharged its burden to prove concealment ? 4. Whether upon the facts and circumstances of the case, the Tribunal was justified in setting aside the order of CIT(A) deleting the penalty imposed under s. 271(1)(c), on surmises and conjectures ? 5. Whether upon the facts and circumstances of the case, filing of revised return and surrender of the amount, resulted due to totalling mistake of accountant, to be added as extra profit can be termed as fraud, willful... or concealment within the meaning of s. 271(1)(c) of the Act?
(2.) All the aforesaid four questions are interwoven and relate to legality and propriety of levy of penalty under the aforesaid section after not accepting the explanation given by the assessee with regard to the discrepancy in purchase figure detected by the AO.
(3.) The relevant facts may be noticed in brief: The assessee declaring a total income of Rs. 18,860 filed the return of income on 30th Sept., 1993. As per the said return, total purchases were shown at Rs. 29,00,778 and sales at Rs. 31,93,81. An order under s. 143(1)(a) of the Act accepting the return was passed on 11th March, 1994. The assessment was reopened subsequently by Issuing notice under s. 143(2) of the Act. AO asked the assessee to furnish month-wise details of purchases and sales, both quantity-wise and value-wise. The details of purchase were filed on 19th July, 1994 declaring total purchases at Rs. 29,00.778. On scrutiny, the AO found that in the month of January, 1993 as per ledger, purchases were made to the tune of Rs. 2,28,280 while as per details furnished by the assessee, it was shown at Rs. 3,28,280. The return was again revised on 23rd Nov., 1994 declaring the income of Rs. 1,18,860. The assessee surrendered amount of Rs. 1,00,000 on account of inflation of purchases. Certain additions were made by the AO who framed the assessment order. The penalty proceedings giving rise to the present appeal were initiated on the ground that the assessee has inflated the purchases by Rs. 1,00,000 by showing wrong particulars and purchases relating to month of January, 1993. The only explanation offered by the assessee that it was due to mistake of accountant, was not accepted and a sum of Rs. 50,000 was levied as penalty by the penalty order dt. 25th May, 1995. In appeal, CIT(A) set aside the penalty order on the finding that it was a case of mistake on the part of accountant and once the mistake came to the knowledge of assessee, he surrendered the said amount for being added with his income vide order dt. 9th Nov., 1995. The Department carried the matter in further appeal before the Income-tax Appellate Tribunal, Delhi Bench 'SMC-II* : New Delhi (hereinafter referred to as 'the Tribunal*) in ITA No. 529/Del/1996. The Tribunal accepted the appeal and restored the penalty order by order under appeal.;