- (1.) BY THE COURT : This reference application at the instance of Revenue has been filed under S. 256(2) of the IT Act, 1961, seeking opinion of this Court on the following question : "Whether, on the facts and in the circumstances of the case the Tribunal was legally justified in cancelling the penalty imposed under S. 271(1)(c) of the IT Act, 1961 ?"
(2.) THE assessee is a firm carrying on the business of processing of grey cloth. The AO had completed the assessment on a total income of Rs. 6,53,185 against the returned income of Rs. 4,63,511. On appeal by the assessee, CIT(A) reduced the income to Rs. 4,62,430. On appeal by the Department, the Tribunal by order dt. 30th Oct., 1987, modified the income and determined it at Rs. 5,62,430. Thus, an addition of Rs. 1,00,000 was made. The AO initiated proceeding under s. 271(1)(c) and imposed a penalty of Rs. 1,04,954 as he found that the explanation given by the assessee was not bona fide and genuine. The appeal preferred by the assessee was rejected. However, the Tribunal on though appreciation of the material on record, found the explanation, given by the assessee, bona fide and genuine. Accordingly, Tribunal cancelled the penalty. Having considered the matter, we find that the assessee had given plausible and bona fide explanation for its having failed to file the return of income and; that the said finding of fact does not call for any interference. In view of the aforesaid, no referable question arises from the order of Tribunal Hence, the reference application is rejected.;