V.S.AGGARWAL, J.

1. The ITO, Chandigarh, filed a complaint with respect to offences under ss. 276C and 277 r/w s. 278B of the IT Act. It was asserted that the petitioner No. 1 is a partnership concern comprising petitioners Nos. 2 and 3 as its active partners. The petitioner No. 1 filed its return on income for the asst. yr. 1980-81 on 14th July, 1980. It declared a loss of Rs. 30,540. It was found that the petitioner No. 1 had debited a sum of Rs. 30,500 on account of provisional purchases allegedly made from Camera India Photographic Co. Ltd., New Delhi and Camera Works Pvt. Ltd., Bombay. It was further revealed that no such goods were supplied to the petitioner No. 1. It had introduced bogus purchases under the garb of provisional purchases. This was done only in order to reduce the correct income of the petitioner No. 1. This amount was added towards bogus purchases. The income of petitioner No. 1 was assessed with profit of Rs. 34,071. Subsequently, penalty proceedings were initiated against the petitioner No. 1. A penalty was levied. It was asserted that the petitioners had deliberately and wilfully concealed the real income in order to avoid payment of taxes. Hence t