- (1.) THESE three applications under S. 256(2) of the IT Act, 1961, have been preferred by an assessee praying that the Tribunal, Allahabad, be directed to state respective cases and refer the following questions stated to be of law and to arise out of the common order dt. 22nd April, 1996, passed in ITA Nos. 1306, 1307 and 1308(All) of 1992, for the asst. yrs. 1981 -82, 1982 -83 and 1983 -84 respectively, for the opinion of this Court. Question in I.T.A. No. 151 "Whether, on the facts and in the circumstances of the case, particularly in view of the assessee's letter dt. 17th Dec., 1985, relied upon by the Tribunal in ITA No. 525(All) of 1987, the Tribunal was right in holding that penalty under S. 271(1)(c) was exigible ?" Question in ITA No. 157 "(i) Whether, on the facts and in the circumstances of the case, particularly in view of the assessee's letter dt. 17th Dec., 1985, relied upon by the Tribunal in ITA No. 525 (All) of 1987, the Tribunal was right in holding that penalty under S. 271(1)(c), was exigible ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the loss returned by the assessee should be added to the income finally assessed for the purpose of levy of penalty ?" Question in ITA No. 150 "(i) Whether, on the facts and in the circumstances of the case, particularly in view of the assessee's letter dt. 17th Dec., 1985, relied upon by the Tribunal in ITA No. 525 (All) of 1987, the Tribunal was right in holding that penalty under S. 271(1)(c) was exigible ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the loss returned by the assessee should be added to the income finally assessed for the purpose of levy of penalty ?"
(2.) WE have heard Sri Rajesh Kumar, learned counsel for the assessee and Sri. A.N. Mahajan, learned counsel for the Commissioner -respondent. The assessee is a dealer in medicines. It did not file its returns of income for the years under consideration. A search and seizure operation was conducted against the assessee on 29th June, 1993, during which incriminating documents in the form of cash memo, loose papers, etc. were seized. Thereafter, notices under S. 148 were issued and the assessee filed the return of income showing losses of Rs. 30,500, Rs. 88,940 and Rs. 1,42,350, respectively. The assessment, however, was made on an income of Rs. 86,890, Rs. 1,16,310 and Rs. 23,250, respectively. This was done by applying a net rate of 3 per cent to the sales as disclosed by seized papers. The AO initiated proceedings for the levy of penalty under S. 271(1)(c) for concealment of income but the applicant's contention was that there was no concealment and that through a letter dt. 17th Dec., 1985, it had offered to be assessed at a net profit rate of 3 per cent on the amount of sales subject to the condition that no penalty is levied. This explanation has not been accepted and the penalties have been upheld in the first and second appellate stage also.
(3.) THE common question that is raised in these petitions is whether the Tribunal was right in upholding the levy of penalty in view of the assessee's letter dt. 17th Dec., 1985. The Tribunal has found that the said letter was not the basis of the assessment and the finding in the assessment order about the correct extent of income and in the penalty order about the act of concealment of particulars of income is based on an appreciation of facts of the case and the material on record.;