- (1.) THIS reference application has been moved by the assessee, Bhuramal Rajmal Surana, under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for directing the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, to refer the questions raised by the petitioner in this petition to this court.
(2.) FOR the assessment year 1966-67, the assessee had submitted a return declaring an income of Rs. 75,000 and, vide the assessment order dated April 26, 1973, the Income-tax Officer assessed the income of the assessee at Rs. 1,41,595. Proceedings under Section 147(a) of the Act were initiated against the assessee by the Income-tax Officer. In response to the notice issued under Section 148 of the Act and in those proceedings, the assessee submitted a return on June 29, 1974, declaring the income of Rs. 1,41,595. Subsequently, the assessee on September 26, 1974, moved a settlement petition before the Commissioner of Income-tax, Rajasthan, and on that petition, the Commissioner passed an order dated October 31, 1974, whereby an additional income of Rs. 84,112 was directed to be assessed for the assessment year 1966-67 and thereupon, the assessee filed a revised return on October 31, 1974, declaring an income of Rs. 2,25,707 and on that basis the assessment order was passed by the Income-tax Officer assessing the income of the assessee at Rs. 2,25,707. Penalty proceedings were initiated against the assessee under Section 271(1)(c) of the Act and the Inspecting Assistant Commissioner, vide order dated March 31, 1976, imposed a penalty of Rs. 1,03,620. The said penalty was divided in two components, Rs. 19,508 was 20% of the difference of tax sought to be evaded on total income of Rs. 2,25,707 and returned income of Rs. 75,000 and Rs. 84,112 was penalty by way of 100% on the income concealed as at June 29, 1974. The assessee moved the Commissioner of Income-tax and before the Commissioner, the assessee's representative agreed that the minimum penalty imposable for the assessment year 1966-67 may be reduced to Rs. 59,508 (Rs. 19,508 plus Rs. 40,000) and on the said admission of the assessee's representative, the Commissioner of Income-tax reduced the penalty from Rs. 84,112 to Rs. 40,000. Thereafter, the matter was taken up before the Income-tax Appellate Tribunal. The Tribunal, by its order dated August 21, 1987, upheld the order of the Commissioner whereby the penalty was reduced to Rs. 40,000 in view of the admission of the assessee. The application moved by the assessee for making a reference to this court was rejected by the Tribunal by order dated July 26, 1988. Hence, this application by the assessee to this court. We have heard learned counsel for the petitioner in support of the assessee and we have also perused the orders passed by the Commissioner of Income-tax as well as the Income-tax Appellate Tribunal. We find that the penalty of Rs. 84,112 which was imposed by the Inspecting Assistant Commissioner was reduced to Rs. 40,000 on the basis of the admission made by the representative of the assessee. Learned counsel for the assessee has urged that the admission of the assessee cannot be conclusive and that penalty can only be imposed in accordance with the provisions of Section 271 of the Act. It has been submitted that under Section 271 as it stood at the time the original return was filed, penalty could only up to the extent of 20% of the difference of tax and that Rs. 19,508 has been imposed as penalty on that basis and that the further penalty of Rs. 40,000 could not be imposed. In our view, this contention cannot be accepted because the assessee filed a revised return on June 29, 1974, showing an income of Rs. 1,41,595. The said income was also less than the assessed income of Rs. 2,25,707. The assessee was, therefore, liable for imposition of penalty of 100% on the income assessed on June 29, 1974, in accordance with the provisions of Section 271 of the Act as in force on June 29, 1974. The penalty of Rs. 40,000 imposed on the assessee cannot, therefore, be held to be in contravention of the provisions of the Act. In our opinion, no question of law requiring consideration by this court arises out of the order passed by the Tribunal. The reference application is, therefore, dismissed.;