JAWAHAR LAL GUPTA, J. - (1.) HAS the Tribunal erred in holding that no penalty was leviable under S. 271(1)(c) of the IT Act, 1961 ? This is the short question that arises for consideration in this case.
(2.) A few facts may be noticed. The assessee is running a brick -kiln. In the income -tax return for the year 1983 -84 the AO made an addition of Rs. 78,000 to the assessee's trading account. He made another addition of Rs. 6,156 on account of sales -tax and Rs. 9,738 by disallowing the claim regarding payment of royalty. Thus, a total addition of Rs. 93,894 was made. The assessee filed an appeal before the CIT(A). The additions were confirmed. Not satisfied with the order, the assessee filed a second appeal before the Tribunal. On consideration of the matter, the Tribunal found that "it will meet the ends of justice if an addition of Rs. 40,000 is sustained" in the trading account. So far as the payment of sales -tax is concerned, a deduction of Rs. 1,956 was allowed. The addition on account of royalty was sustained. Thus, relief to the extent of Rs. 39,956 was allowed to the assessee. The Revenue did not challenge the order passed by the Tribunal. The AO vide order dt. 10th June, 1991, imposed a penalty of Rs. 60,000. Aggrieved by the order, the assessee filed an appeal which was partly allowed by the CIT(A). The assessee approached the Tribunal. Vide its order dt. 6th Oct., 1999, the Tribunal found that the addition of Rs. 40,000 had been sustained "on estimate basis..........." Similarly, it was further found that even the addition of Rs. 4,200 on account of sales -tax liability involved a "matter of debate....." It held that the claim made by the assessee in respect of the sales -tax "may have been under erroneous understanding of law but it cannot lead to the conclusion of concealment on the part of the assessee." Thus, it was held that penalty was not leviable. Aggrieved by the order of the Tribunal by which the levy of penalty has been annulled, the Revenue has filed the present appeal. Mr. Sawhney, learned counsel for the appellant, contends that the case falls squarely within the mischief of S. 271(1)(c) of the IT Act, 1961. He relies on Expln. 1 to support the claim. Reference has also been made to the decision of the apex Court in Addl. CIT vs. Jeevan Lal Sah (1994) 117 CTR (SC) 130 : (1994) 205 ITR 244 (SC) : TC 50R.973 and to the decision of the Madhya Pradesh High Court in Addl. CIT vs. Smt. Chandrakanta & Anr. (1992) 108 CTR (MP) 82 : (1994) 205 ITR 607 (MP) : TC 50R.185.
(3.) THE short question that arises is -Did the assessee conceal the income so as to entitle the Revenue to impose penalty ?;