COMMISSIONER OF INCOME TAX Vs. SHIVLAL DESAI AND SONS

JUDGEMENT

(1.) THIS is a reference at the instance of the CIT under S. 66(2) of the Indian IT Act, 1922. The following question has been referred :

(2.) IN our opinion, the question as framed seems to suggest that sitting as a Court of appeal we can consider the propriety of the decision of the Tribunal in cancelling the levy of penalty on the assessee. Inasmuch as our jurisdiction is a limited one, it becomes necessary to re frame the question as follows :

(3.) IT is well settled that merely because the payment of Rs. 55,000 has been disallowed in the assessment proceedings of the assessee, it will not necessarily bring in its wake a levy of penalty. Sec. 28(1)(c) calls for levy of penalty only in cases where the assessee has concealed particulars of his income or deliberately furnished inaccurate particulars of such income. In para 9 of the statement of the case, the Tribunal has referred to various aspects of the case, which are predominantly documentary, by reason of which the Tribunal was constrained to hold in its order dt. 23rd January, 1964, cancelling the levy of penalty, that the Department had failed to prove that the assessee was guilty of the offence charged and that the assessee was required to be given the benefit of the doubt.