COMMISSIONER OF INCOME TAX vs SUKHDEO CHARITY ESTATE.

J. S. Verma, J. - This is a reference made at the instance of the Revenue under s. 256(1) of the IT Act, 1961 to answer the following question of law namely :

"Whether on the facts and in the circumstances of the case the Tribunal was right in cancelling the penalty under s. 271(1)(c) on the ground that the IAC did not have jurisdiction to levy the penalty on 1-5-1978 ?"

The above question arose on the basis of entry of Rs. 1,00,000 received by the assessee which was initially held to be a part of the assessees income. Ultimately it has been held by this Court in a reference that this amount of Rs. 1,00,000 was not liable to be included in the income of the assessee. That decision is Sukhdeo Charity Estate Vs. Commissioner of Income Tax, There is no dispute that as a result of exclusion of this amount of Rs. 1,00,000 from the income of the assessee, the very foundation for imposition of penalty under sections 271(1)(c) has become non-existent. This is an undisputed position before us. It is therefore, clear that in this situation it is now unnecessary to answer the above question of law which has been referred for the decision of this Court.

The reference is disposed of accordingly. No order as to costs.