IMPORTANT POINT
The Tribunal is the final court of fact. The decision of the Tribunal on the facts can be gone into by the High Court in the reference jurisdiction only if a question has been referred to it which says that the finding arrived at by the Tribunal on the facts is perverse, in the sense that no reasonable person could have taken such a view.

JUDGMENT

Ashok Bhan, J. —

1. These appeals have been filed by the assessee against the final judgment and order dated 6th October 2001 passed by the High Court of Karnataka at Bangalore in ITRC Nos. 684/98, 685/98, 686/98 and 687/98 by which the High Court while setting aside the order of assessment passed by the Income Tax Appellate Tribunal (for short, ‘the Tribunal’) and that of the Commissioner of Income Tax (Appeals), held that the facts and circumstances of the case warranted levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961 (for short “the Act”).

2. The assessment years involved in the present Appeals are 1984-85, 1985-86, 1986-87 and 1987-88.

Facts:

3. A search was conducted on the premises of the assesses on 14th and 15th of October, 1987 and incriminating documents evidencing concealment of income by the assessee were unearthed apart from cash and jewellery found at the time of search. It was found that the appellant was maintaining double set of books and was accounting for only 50% of sales in the regular set of books. This fact was admitted by Shri J.S. Ramesh, a partner of the firm in the statement recorded under Section 132(4) of the Act. Shri J.S. Ramesh is the person-in-charge of the entire group. The total turn over suppressed by the assessee for the assessment year 1987- to be to the tune of Rs.44,07,783/-. These have been discussed in detail in the order of assessment. Assessing Officer estimated that the sales of the assessee were Rs.50,000/- per day, whereas the accounted sales were not found even 50% of the total sales. Apart from this, it was found that certain purchases were also not being accounted for. Similarly certain payments made were not being accounted for. All these were pointed out to the assessee. The assessee came forward with offer of additional income. Assessee filed a revised return on 31st March, 1989 declaring a total income for this year at Rs.3,74,226/- as against the earlier amount of Rs.43,650/-. This was accepted and after verification the assessment was completed on 29th December, 1989.

4. During the course of recording the statement under Section 132(4) of the Act, Shri Ramesh agreed to declare such additional income as had been estimated by the search party in the office of the appellant and its sister concerns. On the basis of these calculations, revised returns were filed by the appellant for all the years under appeal. The income as per revised returns was also accepted in Toto. In the course of assessment proceedings, penal action under Section 271 (1) (c ) of the Act was initiated and, after considering the reply filed by the appellant, the learned Assistant Commissioner of Income Tax / Assessing Officer chose to levy maximum penalty under Section 271 (1) (c ). While levying the penalty, the Assessing Officer repelled the contention of the appellant that a promise had been made not to levy the penalty, as there was no evidence to this effect on record. It was also held that the appellant was not entitled to the immunity given under Section 132(4) read with Section 271 (1) (c ) of the Act.

5. Aggrieved against the levy, the appellant filed appeal before the CIT (Appeals). The CIT (Appeals) after detailed discussion and going through the appeal papers, recorded the following findings :

“Besides there are several factors which would clearly show that the appellant filed the return merely for the purpose of purchasing peace. Although I have held that the provisions of Section 132 (4) r/w Explanation 5 to Sec. 271(1)(c) are not applicable, the record show very clearly that the appellant was under a strong impression that the statement by which he was disclosing additional amounts was made under the provisions of Section 132 (4). Question 88, which has come at the end of an extremely long session of questioning (the record of which itself runs to 30 pages) is as follows :-

“I have explained to you the provisions of section 132 (4) of the I.T. Act, 1961 would you