Commissioner of Income Tax vs Yadu Raj Narain Singh

This application has been filed u/s 256(2) of the Income Tax Act, 1961. The Commissioner of Income Tax, Meerut, has prayed for a direction to the Income Tax Tribunal to draw up the statement of the case and to refer the following question of law for the opinion to this court :

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally justified in deleting the penalty u/s 271(1)(b) on the basis that the computation of penalty u/s 271(1)(ii) could not be made in this case, ignoring the fact that the return filed by the assessee on July 28, 1986, though invalid showing total loss of Rs. 390 and agricultural income at Rs. 10,000 could be taken into consideration for computing the amount of penalty leviable u/s 271(1)(ii) of the Income Tax Act, 1961 ?"

We have heard Sri Prakash Krishna, learned counsel for the applicant. Nobody has put in appearance on behalf of the assessee despite service of notice for which an affidavit of service has also been filed.

In our opinion, the question raised by the Revenue is a question of law arising out of the Income Tax Tribunal. Accordingly, we direct the Income Tax Appellate Tribunal, Delhi Bench "D", New Delhi, to draw up a statement of the case and refer the aforementioned question of law to this court. In the result, the Income Tax application is allowed.