AJAY TEWARI, J. - (1.) PENALTY under s. 271(1)(c) of the IT Act, 1961 was imposed upon the assessee. (1) This appeal proposes the following substantial questions of penalty imposed by the AO under s. 271(1)(c) of the Act which was confirmed by the learned CIT(A) also ? (2) On the facts and in the circumstances of the case whether explanation to s. 271(1)(c) needs to be specifically adverted to in an ex parte order levying penalty under s. 271(1)(c), when the provisions of s. 271(1)(c) are otherwise attracted ?
(2.) FOR the asst. yr. 1990 -91, a penalty of Rs. 1,38,454 was levied upon the assessee which was confirmed by the CIT. In appeal, the Tribunal found that the CIT(A), while confirming the penalty, no where stated that the assessee had not disclosed all the facts to compute the income. It also found that the addition to income had been made on the basis of an estimate but without bringing any material on record which could substantiate that there was a failure on the part of the assessee to return correct income due to fraud or wilful neglect or furnishing of inaccurate particulars of income.
(3.) THIS Court in CIT vs. M.M. Rice Mills (2002) 253 ITR 17 (P&H) held as follows : "Merely because the addition had been made to income under the proviso to s. 145(1) of IT Act, 1961 by adopting the view that the gross profit shown in the books of accounts was too low as there were defects in the method of accounting employed, it would not automatically lead to the conclusion that there was failure to return the correct income by means of fraud or gross or wilful neglect." We find no error in the judgment of the Tribunal. The above quoted judgment applies squarely to the facts of this case. In this view of the matter, we hold that the questions proposed do not arise in this appeal and dismiss the same with, however, no order as to costs.;