SATISH CHANDRA, J. - (1.) THE assessee is a liquor contractor of Muzaffarnagar. For the asst. yr. 1968-69 he filed a return of income on 25th Jan., 1969, showing a total income of Rs. 14,100, which included a sum of Rs. 8,000 as income from a wine shop. The assessment was completed on 22nd May, 1969, on a total income of Rs. 17,100. Subsequently the ITO came to know that assessee had suppressed the account books, though he was maintaining the same. He reopened the assessment.
(2.) IN response to the notice issued under S. 148 the assessee filed a revised return on 24th Oct., 1969, showing an income of Rs. 17,100 which was the amount on which he was assessed previously. The ITO completed the re-assessment on 13th March, 1972, on a total income of Rs. 32,264, which included income form the wine shop at Rs. 25,104. At the time of the completion of the re-assessment proceedings the ITO initiated penalty proceedings under S. 271 (1)(c) on the ground that the business income of Rs. 13,252 had been suppressed by the assessee. In the course he imposed a penalty of Rs. 13,252 by an order dt. 25th March, 1974.
(3.) THE assessee appealed. The AAC cancelled the penalty on the ground that the assessee was not afforded a reasonable opportunity of hearing.;