COMMISSIONER OF INCOME TAX Vs. JHAVERBHAI BIHARILAL AND COMPANY

JUDGEMENT

(1.) THIS is a reference under Section 256(2) of the Income-tax Act, 1961 (hereinafter called "the Act"). The question referred to us for our opinion is as follows :

(2.) IN this reference, we are concerned with the assessment year 1968-69. The assessee is a dealer in biri leaves. For the assessment year in question, he showed cash credits of Rs. 80,374 with interest. His claim of credit from others in this regard was not accepted by the Appellate Assistant Commissioner and the INcome-tax Appellate Tribunal in the quantum appeals. The sum assessed was Rs. 5,53,340 as against a returned income of Rs. 2,70,451. There being a difference between the returned income and the assessed income of more than twenty per cent., a proceeding for levy of penalty under Section 271(1)(c) read with Section 274(2) of the Act was initiated. Since the penalty to be levied was likely to exceed Rs. 1,000, the INcome-tax Officer referred the matter to the INspecting Assistant Commissioner who levied a penalty of Rs. 85,000. The assessee, being aggrieved by the order of the INspecting Assistant Commissioner, appealed to the Tribunal. The Tribunal allowed the appeal and set aside the order of penalty.

(3.) WE, therefore, refuse to answer the question referred to us. There shall be no order as to costs. WE hope the Tribunal will dispose of the matter expeditiously.