- (1.) THE Tribunal, Delhi, has referred the following question of law under s. 256(1) of the IT Act, 1961 (hereinafter referred to as 'the Act') for opinion to this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was, in law, justified in holding that penalty provisions under s. 271(1)(c) of the Act are not attracted in this case and, thus, in deleting the penalty imposed under s. 271(1)(c) of the Act -
(2.) THE dispute relates to the asst. yrs. 1980 -81 and 1981 -82. The respondent/ assessee, a registered firm, filed its return showing the total income of Rs. 29,280 but the assessment was completed on a total income of Rs. 57,740. The AO during the course of assessment proceedings for the asst. yr. 1981 -82 found that the assessee had sold its machinery for Rs. 20,000 in the earlier asst. yr. 1980 -81. Consequently, the reassessment proceedings to assess the profits earned on sale of machinery in the relevant year were initiated. The reassessment was completed on a total income of Rs. 61,680 considering the relief allowed by the AAC in appeal filed against the original assessment. On the basis of the aforesaid addition, the ITO initiated penalty proceedings under s. 271(1)(c) of the Act. In reply to the show - cause notice it was contended by the assessee that all the details of purchase and sale of machinery were filed along with the original return and after seeing the details the assessment was completed under s. 143(3) of the Act. The assessee submitted that it did not file inaccurate particulars of its return of income. It was under the impression that on the sale of machinery no income -tax would be attracted and as such the profit on sale of machinery would not be disclosed in the return. Plea of ignorance of provisions of IT law was also invoked. The ITO levied a penalty of Rs. 70,000 in the asst. yr. 1980 -81.
(3.) FOR the asst. yr. 1981 -82, the ITO held that the assessee -firm sold three plots of land which were acquired in the years 1975 -76, 1976 -77 and 1977 -78, but the profit was not disclosed by the assessee in the return. He found that the profit comes to Rs. 7,462 and is taxable under s. 41(2) of the Act and addition was made accordingly. On the basis of the addition in the income of the assessee the penalty proceedings under s. 271(1)(c) were initiated for the asst. yr. 1981 -82 also. A sum of Rs. 7,000 was levied as penalty under s. 271(1)(c) of the Act. The Dy. CIT(A) confirmed the penalty orders in the two appeals filed by the assessee in respect of the aforesaid two assessment years. In further appeal, the Tribunal found that the assessee filed the full particulars of its income at the original stage. The further finding is that inaccuracy of the particulars cannot be attributed and it set aside the penalty orders.;