- (1.) On an application under Section 256(2) of the Income-tax Act, 1961, the following questions set out at page 2 of the paper book are referred by the Tribunal for our opinion : "1. Whether, on the facts and circumstances of the case, the finding of the Tribunal that no clear concealment of income has been established is based on any relevant material or perverse ?
(2.) Whether, on the facts and in the circumstances of the case and on a correct interpretation of Section 271(1)(c) of the Income-tax Act, 1961, read with the Explanation thereto, the Tribunal was justified in holding that no penalty under Section 271(1)(c) of the said Act is exigible in this case ?" 2. The assessee is a firm and the assessment year involved is 1974-75. The assessment for the assessment year 1974-75 was completed on a total income of Rs. 11,79,422 which included an addition of Rs. 4,34,360 under the head "Income from other sources" and Rs. 1,55,567 in the trading account. The Assessing Officer initiated a penalty proceeding under Section 271(1)(c) of the Act. After considering the submissions of the assessee, the Assessing Officer has imposed a penalty of Rs. 4,50,000 under Section 271(1)(c) of the Act.
(3.) In appeal before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) has reduced the penalty amount of Rs. 1,90,000 and allowed relief of Rs. 2,60,000. In appeal before the Tribunal, the Tribunal has cancelled the penalty in toto imposed by the Assessing Officer.;