(1) THIS appeal is directed against the order of the High court of Judicature at Allahabad dated 9/04/1977. The Income Tax Appellate Tribunal B (Bench Allahabad) by its order dated 18/10/1975 held that in the facts and circumstances of the case, it cannot be said that the assessee could not have been under a bona fide belief that its income was below the taxable limit and it was under no obligation to file a return of its income voluntarily. In taking the aforesaid view, the tribunal held that penalty proceedings being criminal or quasi-criminal establishment of mens rea is an essential ingredient and as such the statutory obligation is on the Revenue to prove that the assessee has acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of his obligation.

(2) IN a recent decision of this court in Gujarat Travancore Agency v. CIT this court has held as under:

"LEARNED counsel for the assessee has addressed an exhaustive argument before us on the question whether penalty imposed under Section 271(1(a) of the Act involves the element of mens rea and in support of his submission that it does he has plac