GANPAT RAI SANTU LAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a reference made by the Tribunal, Patna Bench, under Sec. 256(1) of the Income -tax Act, 1961 ('the Act') and a statement of the case has been submitted to this Court for its opinion on two questions which are as follows:

(2.) Whether, on the facts and in the circumstances of the case, the confirmation of the amount of penalty imposed notwithstanding the reduction in the income assessed was correct

(3.) The revenue, being aggrieved by the order of the AAC appealed to the Tribunal and the assessee filed a cross -objection in that appeal. Both the matters were heard and decided together. The Tribunal held that viewing the orders of the ITO in their proper perspectives, it was obvious that the order of the ITO to initiate penalty proceedings was contemporaneous and simultaneous with the assessment order itself. Relying upon a decision of the Madras High Court in the case of Artisan Press Ltd. v/s. ITAT : [1958] 33 ITR 670, the Tribunal held that the penalty proceedings were properly commenced during the course of the main assessment proceedings and the departmental appeal was allowed. A copy of the Tribunal's order has been marked Annexure 'C' to the statement of the case. It is worthwhile to mention that in the Tribunal's appellate order an observation was made to the following effect: