- (1.) The present appeal has been filed under section 260A of the Income-tax Act, 1961, hereinafter referred to as "the Act" against the order dated November 17, 1998, passed by the Income-tax Appellate Tribunal, Agra Bench, Camp at Delhi. The appeal has been admitted, vide order dated August 30, 2000, on the following substantial question of law: Whether, on the facts and in the circumstances of the case, the Tribunal is legally justified in sustaining the penalty under section 271(1)(c)? Briefly stated the facts giving rise to the present appeal are as follows: The appeal relates to the assessment year 1989-90 in respect of the penalty imposed under section 271(1)(c) of the Act. The appellant is a registered partnership firm. For the assessment year 1989-90, it had filed its return of income declaring an income of Rs. 69,170. Regular assessment proceedings under section 143(3) of the Act was initiated and in response to the same a notice under section 143(2) of the Act was issued. The asses-see along with its counsel participated and furnished the requisite information. An extra liability of Rs. 2,26,079.65 in respect of certain sundry creditors was found by the Assessing Officer and the appellant was required to explain the difference. In the reply filed by the appellant it was stated that the balance as per the account books are correct and the balance shown by the party not correct. However, with a view to end the prolonging of the assessment proceedings and to buy peace the appellant has agreed for an addition of Rs. 2,26,079.65. The amount so surrendered was added towards income by the Assessing Officer. The penalty proceedings under section 271(1)(c) of the Act was initiated. The appellant submitted its reply. However, the Assessing Officer imposed a sum of Rs. 1,25,000 as penalty after holding that the explanation offered by the appellant could not be substantiated and was not bona fide.
(2.) Feeling aggrieved the appellant preferred an appeal before the Commissioner of Income-tax (Appeals), Agra, who, vide order dated December 30, 1991, partly allowed the appeal and reduced the amount of penalty to the minimum leviable. Feeling aggrieved the appellant preferred a further appeal before the Tribunal. The Tribunal, vide the impugned order has dismissed the appeal.
(3.) We have heard the learned counsel for the parties.;