Commissioner of Income Tax vs Mohd. Bux Sokat Ali

This is a reference application at the instance of the Revenue u/s 256(2) of the Income Tax Act, 1961, arising from the order of the Income Tax Appellate Tribunal dated May 1, 1998.

The assessing authority made the assessment at the total income of Rs. 5,90,300 against the returned income of Rs. 2,45,224. The assessing authority also passed an order u/s 186(1) of the Act refusing the continuation of registration. He also made an addition of Rs. 3,30,232 on account of clubbing the income of M/s. Mohd. Bux Shokat Ali. The Tribunal vide order dated January 8, 1991, granted registration and deleted the addition. However, the Assessing Officer imposed penalty of Rs. 20,000 u/s 271(1)(c) vide order dated February 22, 1990. The Commissioner of Income Tax (Appeals) cancelled the penalty on the ground that the firm has been granted registration and the addition has been deleted. The order was upheld by the Income Tax Appellate Tribunal on the ground that the very basis for levying penalty did not survive. The Revenue has approached this court for reference in view of the fact that the reference application against the earlier order of the Income Tax Appellate Tribunal dated January 8, 1991, is pending before this court. Learned counsel for the Revenue has brought to our notice that the said Income Tax reference has been rejected for default in compliance. Be that as it may the order of the Income Tax Appellate Tribunal, directing registration and deleting addition has become final. Thus no referable question of law arises from the order of the Income Tax Appellate Tribunal. The reference application is accordingly rejected.