- (1.) WE have heard Shri Dhananjai Awasthi, learned counsel appearing for the Department. Shri Ashish Bansal appears for the respondent -assessee. This income -tax appeal filed under section 260A of the Income -tax Act, 1961, arises from an order of the Income -tax Appellate Tribunal, Lucknow Bench "B", Lucknow, dated November 7, 2008, for the assessment year 1992 -93.
(2.) THE appeal has been preferred by the Department on substantial question of law as follows: 1. Whether, on the facts and in the circumstances of the case, the hon'ble Tribunal was justified in law in deleting the penalty of Rs. 5,00,000 imposed by the Assessing Officer under section 271(1)(c) of the Act and confirmed by the learned Commissioner of Income -tax (Appeals) -II, Kanpur, without appreciating that the surrender made on account of undisclosed income for the assessment year 1992 -93 during the course of search and seizure operation conducted on October 17, 1994, was made much after the due date of filing of the return of income under section 139(1) of the Act as well as after completion of the original assessment proceedings under section 143(3) of the Act on March 24, 1994, and, therefore, the act of concealment was completed for failure not to disclose the said undisclosed income either in his original return of income or at the time of assessment proceedings under section 143(3) of the Act and penalty is leviable in terms of Explanation 5 to section 271(1)(c) of the Act. In the proceedings under section 271(1)(c) of the Act the Income -tax Officer levied penalty on the ground that the assessee had concealed the particulars of income and furnished the inaccurate particulars of his income of Rs. 5,39,300 as unexplained investment on renovation of house, and Rs. 82,000 as unexplained income from pawning business.
(3.) THE Commissioner of Income -tax (Appeals) upheld the order on the reasoning given as follows:;