JUDGMENT
By The Court
1. The petitioner seeks reference of the following questions to this Court :
“1. Whether the Tribunal was justified in rejecting the contention of the assessed that the order of the ITO under s. 271(1)(c) dt. 24th March, 1981 was bad in law and ab initio invalid inasmuch as the ITO invoked the provisions of Explanation 1(A) appended to s. 271(1)(c) operative after 31st March, 1976 by which the case of the assessed was not covered; the case of the assessed was legally covered by the provisions of the old ‘Explanation’ to s. 271(1)(c) which remained operative up to 31st March, 1976.
2. Whether the Tribunal was right in rejecting the contention of the assessed that the CIT(A) had over-stepped his jurisdiction in changing over from the new Explanation 1(A)’ to the old Explanation’ appended to s. 271(1)(c) of the IT Act ?
3. Whether the Tribunal was justified on facts and in law in rejecting the plea of the assessed that it had created doubt in its favor by pointing to the facts on record and had thereby discharged the initial onus cast on it by the ‘Explanation’ to s. 271(1)(c), thus consequently becoming not liable to penalty under s. 271(1)(c) ?
4. Whether the Tribunal was right in rejecting the plea of the assessed that it was a case where the explanation of the assessed in support of the cash credits of Rs. 95,000 had not been found acceptable and that in view of the accepted legal position that the absence of a proof acceptable to the Department cannot be equated to fraud or willful neglect, its case was not hit by the provisions of the ‘Explanation’ s. 271(1)(c) ?
5. Whether the Tribunal was right in rejecting the plea of the assessed that no penalty under s. 271(1)(c) could be imposed in this case for the asst. yr. 1975-76 on account of unproved cash credits of Rs. 95,000 in as much as the ITO had not established that this amount constituted the income of the assessed for the relevant previous year, i.e., the financial year 1974-75 and the penalty order was therefore bad in law ?
6. Whether the Tribunal was right in rejecting the plea of the assessed that the scope of deeming provisions of s. 68 could not be extended to s. 271(1)(c) for the purpose of levy of penalty on unproved cash credits of Rs. 95,000 and the penalty order of the ITO was, therefore, bad in law ?
7. Whether the Tribunal was right in upholding the penalty order of the ITO as well as the appellate order of the CIT(A) although the same had been passed without bringing on record any relevant additional evidence in terms of the principles laid down by the Supreme Court in CIT vs. Khodey Eswersa .
8. Whether the Tribunal was legally right in not accepting the plea of the assessed that the jurisdiction to impose penalty under s. 271(1)(c) in this case for the asst. yr. 1975-76 lay with the IAC and not with the ITO and the penalty order passed by the ITO was, therefore, quashable being without jurisdiction ?
The question involved is with regard to levy of penalty. In the order passed by the Tribunal s. 256(1), it has been observed as under :
Question Nos. 1 and 2 as framed, were discussed in detail by the Tribunal in para 7 while deciding the appeal. The Tribunal pointed out that at the time of completing assessment the ITO initiated penalty proceedings under s. 271(1)(c) of the Act, 1961. Simply because the ITO in the body of the order mentioned a wrong section, it will not invalidate the order Commissioner (A) has clearly held that Explanation to ss. 271(1)(c) was attracted in the present cases. Before the learned Commissioner (A) no such plea was taken that the ITO applied wrong provision for imposing penalty. Moreover the Tribunal after hearing the assessed and considering the material on record came to the finding of fact that provisions of s. 271(1)(c) were attracted. Even according to the assessed in the present case Explanation to s. 271(1)(c) is attracted. That provision was interpreted by the Tribunal after appreciating the facts. Thus no question of law would arise on these points.
9. In the third question it was stated that Tribunal was not justified in rejecting the explanation of the assessed. The Tribunal after appreciating the facts rejected the explanation of the assessed. The Tribunal further found that the entire theory of advancing the loan was bogus. On this point also the finding of the Tribunal is a finding of fact.
10. In question No. 4 it was suggested that Tribunal was not right in rejecting the plea of the assessed that cash credits of Rs. 95,000 were genuine. The Tribunal after appreciating the evidence on record held that the assessed failed to prove that there was no fraud or gross or willful neglect on the part of the assessed in not returning its assessed income. This finding also is essentially a finding of fact.
11. In question No. 5 it was suggested that the Tribunal did not give any finding that the disputed addition was income of the assessed in the year of account. On this point, on facts there was a positive finding of the Tribunal that sum of Rs. 95,000 was income of the assessed in the year of account. The Tribunal further held that the theory of advancing the loan was not genuine. This point was also discussed by the Tribunal in its order in detail.
12. In question No. 6 it was suggested that on account of deeming provision penalty under s. 271(1)(c) was not attracted. The Tribunal on facts found that there was really unproved cash credit. The Tribunal further held that theory of advancing the loan was baseless and in reality the loan was never advanced. Under the circumstances the finding of the Tribunal on this point is essentially a finding of fact.
13. The question No. 7, it was suggested that the Tribunal failed to bring the case within the ratio of decision in the case of CIT vs. Khodey Eswersa, . The Tribunal after discussing the facts came to the finding of fact that penalty under s. 27(1)(c) was leviable.
14. In question No. 8, it was suggested that in the present case the ITO had no jurisdiction to impose penalty. According to the assessed penalty leviable was more than Rs. 25,000 as such the matter should have been referred to the IAC. The Tribunal while deciding the matter on 16th March, 1985 clearly held that s. 274(2) was omitted by Taxation Laws (Amendment) Act, 1975 w.e.f. 1st April, 1975. It further held that in 1978 there was no provision in the Income-tax Act for making reference to the IAC. When there was no provision in the statute book for referring the matter to the IAC, the ITO was having full jurisdiction to impose penalty under s. 271(1)(c) of the Act. The said point is self evident and as such no useful purpose would be served by referring this matter to the Hon’ble High Court.”
2. We are in full agreement with the aforesaid conclusion of the Tribunal. In our opinion, no question of law need be referred. This petition is accordingly dismissed.
3. No order as to costs.