( 1 ) THE assessee and another were intercepted by the customs authority on November 19, 1983, and from them US $ 47,700 and Indian currency of Rs. 1,500 were recovered. A proceeding under Section 135 (1) of the Customs Act was initiated against the said two persons for possessing and dealing with smuggled currency. The customs authority had passed on the information to the Income-tax Department. The Income-tax Department did not take any steps. On October 9, 1986, the assessee filed a return seeking immunity under the voluntary disclosure scheme. The assessee denied the ownership but made out an alternative case, if found otherwise, for deduction of the amount confiscated by the customs authority as business loss. This was not accepted by the Assessing Officer, the Commissioner (Appeals) as well as the learned Tribunal. Reference under Section 256 (1) of the Income-tax Act, 1961, therefrom was pending adjudication before this court. Subsequent to the conclusion of the assessment proceeding, a proceeding, for imposition of penalty under Sections 271 (1) (c), 273 (1) (b) and 271 (1) (a) of the 1961 Act was initiated. The Assessing Officer and the Commissioner (Appeal