DIPAK KUMAR SEN, J. - (1.) BUDDHADEB Dutta, the assessee, was assessed to income-tax for the asst. yr. 1963-64. On a notice issued under s. 147 of the IT Act, 1961, the assessee filed a return on 18th May, 1974, showing that his income in the said assessment year was nil. On an investigation, the ITO found that during the relevant assessment year, a property had been purchased at 18/48, Dover Lane, Calcutta, in the name of the assessee and his five brothers. The share of the assessee in the said property was shown as one-sixth. The ITO treated one-sixth of the purchase price, namely, Rs. 15,830 as having been contributed by the assessee and accordingly he made an addition of Rs. 15,830 to the income of the assessee. On appeal, the AAC as also the Tribunal confirmed the assessment made by the ITO. In the meantime, the ITO initiated penalty proceedings under s. 271(1)(c) of the Act of 1961. A show cause notice was issued by the ITO to the assessee. The assessee did not file any explanation in writing in response to the said notice. The assessee, however, appeared before the ITO and submitted that an appeal had been preferred to the Tribunal against the decision of the AAC confirming the addition to the assessee's income. The ITO found that the assessee had not filed any satisfactory explanation as to why penalty should not be imposed on him and passed an order on 11th March, 1977, imposing a penalty of Rs. 15,830, the minimum imposable on the assessee. Being aggrieved, the assessee filed an appeal against the order of penalty before the AAC. It was contended before the AAC that an explanation had been filed before the ITO who did not consider the same and imposed the order of penalty without giving the assessee any opportunity of being heard. It was also contended that the quantum of penalty was not computed properly.
(2.) THE AAC considered the order passed by the ITO, the order passed in the appeal preferred against the assessment dt. 8th Sept., 1976, as also the order of the Tribunal confirming the addition made by the ITO dt. 18th Jan., 1979. On perusal of the said orders, the AAC came to the conclusion that there was nothing to hold that the assessee actually concealed any income or failed to furnish correct particulars thereof and that no case of concealment had been made out. He held that mere addition in the assessment was not sufficient to uphold the penalty even though the same was confirmed by the Tribunal and accordingly set aside the order of penalty.
(3.) BEING aggrieved, the Revenue came up in appeal from the order of the AAC before the Tribunal. It was contended on behalf of the Revenue before the Tribunal that the Explanation to s. 271 of the Act was applicable to the facts of this case. It was further contended that the assessee had made an investment of Rs. 15,830 during the relevant assessment year and knowingly filed a nil return for the said assessment year. No explanation was filed by the assessee before the ITO in respect of the proposed order of penalty and it should be held that the assessee had knowingly and wilfully concealed the particulars of his income.;