B.R.ARORA, J. - (1.) THE Revenue, in the case of the assessee G.T. Enterprises, Udaipur, for the asst. yr. 1981-82, has moved this application under S. 256(2) of the IT Act and has prayed that the Tribunal, Jaipur Bench, Jaipur may be directed to refer the following questions of law for the opinion of this Court : "(a) Whether, on the facts and in the circumstances of the case, the Tribunal was right in arriving at the conclusion that the claim of development charges was bona fide, in total disregard to the admitted fact that such liability has neither accrued nor incurred ? (b) Whether, on the facts and in the circumstances of the case, the order of the Tribunal cancelling penalty of Rs. 7,43,755 levied under S. 271(1)(c) of IT Act, 1961 is not perverse ? (c) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no penalty under S. 271(1)(c) could be attracted on the facts of the case and thereby cancelling penalty of Rs. 7,43,755 levied under the said section ?"
(2.) THE assessee, G.T. Enterprises, which derived income from dealings in the land, filed its return for the asst. yr. 1981-82 declaring the loss of Rs. 2,87,022. The assessment was completed under s. 143(3) of the Act on the returned loss. While completing the assessment, the assessing authority allowed the claim of development expenses claimed by the assessee. The CIT, Jaipur, exercising its power under S. 263 of the Act, set aside the order passed by the Assessing Officer (AO) and directed the AO to make fresh assessment after giving adequate opportunity to be heard to the assessee. While setting aside the assessment made by the ITO, the CIT observed that "the assessment was completed without properly examining the claim of the development expenses". The assessee preferred an appeal before the Tribunal, Jaipur Bench, Jaipur. The Tribunal affirmed the order passed by the CIT(A). After the order being confirmed by the Tribunal, Jaipur Bench, Jaipur, the reassessment proceedings were initiated and fresh assessment was made by the ITO on 2nd March, 1988 and the assessee was reassessed at the income of Rs. 10,09,980. While completing the assessment, the AO disallowed the claim of development expenses as claimed by the assessee. The order passed by the AO was confirmed in appeal by the CIT(A). The AO, while completing the assessment, issued the notice to the assessee to show cause why the penalty under ss. 271(1)(b), 273 and 271(1)(c) of the Act may not be imposed and thereafter vide its order dt. 28th June, 1989, after getting the approval of the Dy. CIT, Range II, Jaipur, levied the penalty of Rs. 7,43,755. The order passed by the assessing authority imposing the penalty was upheld by the CIT(A) II, Jaipur vide its order dt. 2nd Feb., 1990. The assessee went in appeal before the Tribunal, Jaipur Bench, Jaipur and the Tribunal, by its order dt. 17th May, 1991, allowed the appeal filed by the assessee and cancelled the penalty.
(3.) AGGRIEVED with the order dt. 17th May, 1991 allowing the appeal filed by the assessee, the Revenue moved an application under S. 256(1) of the Act before the Tribunal to refer the three questions of law mentioned in the application (as mentioned in para 1 above). The Tribunal, by its order dt. 20th July, 1993 dismissed the application filed by the Revenue and refused to refer the questions of law mentioned in the application for the opinion of this Court on the ground that the findings recorded by the Tribunal are based on the appreciation of the relevant facts and material on record and are essentially the findings of fact which do not give rise to any question of law for reference. The Revenue, thereafter, moved the present application under S. 256(2) of the Act before this Court.;