COMMISSIONER OF INCOME TAX vs LAXMI STORES

Rajesh Balia, J.

In this case an application u/s 256(2) has been made for directing the Tribunal to state the case and refer the following question of law said to be arising out of its order passed in appeal in the case of respondent-assessee for the assessment year 1985-86 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the first appellate authority [Deputy Commissioner of (Appeals)] who cancelled the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961, by holding that though the facts disclosed concealment of income by the wholesal dealers of the GPIL yet such dealers could not be successfully visited upon with penalty u/s 271(1)(c) in view of the circumstances they were forced to charge on money ?"

It is pointed out by learned counsel for the parties that application u/s 256(2) arising out of order passed in appeals filed by sister concern of the respondent- assessee M/s Laxmi Sales for the assessment years 1985-86 and 1986-87 by a common order has been decided by this court on 27-2-2001, which is D.B. IT Ref. No. 108/98 Commissioner Of Income Tax Vs. Laxmi Sales, , by holding the order of the Tribunal rejecting the application for making a reference u/s 256(1) to be erroneous and has directed the Tribunal to state the case and refer a following question of law said to be arising out of the Tribunal''s order for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the first appellate authority (Deputy Commissioner of (Appeals)) who cancelled the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961, by holding that though the facts disclosed concealment of income by the wholesale dealers of the GPIL yet such dealers could not be successfully visited upon with penalty u/s 271(1)(c) in view of the circumstances they were forced to charge on money ?"

Accordingly, we allow this application also following the decision and direct the Tribunal to refer the aforesaid question of law to this court along with the statement of the case.