Ajit K.Sengupta, J. - (1.) In this reference under Section 25G(2) of the Income-tax Act, 1961, the following question of law for the assessment year 1980-81 has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the excise duty liability arises on the basis of the show-cause notices issued by the Central Excise Department and, in thai view of the matter, the claim for excise duty liability amounting to Rs. 2,04,421 is allowable in assessment ?"
(2.) The facts, briefly stated, are as follows : The assessee claimed an amount of Rs. 2,10,421 on account of demand notices received during the year. But the Income-tax Officer found that the assessee's claim in respect of Rs. 2,04,421 is based on mere "show-cause notices" and that they did not create an enforceable legal liability during the previous year. As far as the amount of Rs. 6,000 was concerned, the Income-tax Officer had disallowed the same on the ground that it represented penalty imposed on the assessee for infraction of law.
(3.) On appeal, the Commissioner of Income-tax (Appeals) agreed with the view of the Income-tax Officer and confirmed the disallowances.;