JUDGMENT
This is an appeal under section 260A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
2. For the assessment year 1994-95, as against the returned income of Rs. 4,08,950, assessment was completed on a total income of Rs. 8,72,302. Proceedings under section 271(1)(c) were initiated and Rs. 2,66,427 was imposed as penalty. The assessed questioned the imposition of penalty on the ground that it had surrendered its income for addition to buy peace and tranquility and there was an understanding not to levy penalty. This plea was not accepted by the assessing officer as well as by the Commissioner (Appeals) on the ground that there was no material to show that there was any conditional surrender of income.
3. However, the Tribunal, Delhi Bench ‘C’, cancelled the penalty placing reliance on the decision of the Apex Court in Sir Shadi Lal Sugar & General Mills Ltd. v. CIT (1987) 168 ITR 705 (SC). It was held that the assessed had made a conditional offer for surrender and, therefore, penalty was not imposable, in view of the decision of the Delhi Bench of the Tribunal in the case of Harnam Singh Bishan Singh Jewellers (P) Ltd. v. Asstt. CIT (2000) 69 TTJ 14 (Del).
4. In support of the appeal, the learned counsel for the revenue submitted that there is no material on record to show that there was any conditional offer for addition to the returned income. On the contrary, in view of the assessed’s admission that he was not in a position to substantiate the claims for expenses, the accounts were rejected and the net profit rate was applied to the admitted receipts. The proceedings were initiated for furnishing inaccurate particulars and not for concealment, as was made out by the Tribunal. The learned counsel for the assessed on the other hand submitted that the assessed’s conduct in agreeing to the additions shows bona fides and not the absence of it. The receipts have not been disputed and it has also not been disputed that without hoardings being displayed receipts cannot be made. The final results of the assessment were better than those of the previous year. In that background it has to be held that there was no concealment and even otherwise the assessed could have produced materials before the Tribunal to show that inaccurate particulars were not furnished.
5. We find that the Tribunal proceeded on the basis as if there was a conditional offer made by the assessed and that is why there was no concealment to warrant imposition of penalty. As records would go to show that the penalty was imposed for furnishing inaccurate particulars, the alternate stand of the assessed has not been examined by the Tribunal. In the circumstances, instead of keeping the matter pending, we direct the Tribunal to re-hear the matter. It shall permit the assessed to place fresh material, if any, sought to be relied upon and pass a fresh order. Any observation made by us in our order shall not be construed as if we have expressed any opinion on the merits of the case.
Appeal, accordingly, is disposed of.