S.D.Bajaj, J.

1. A partnership concern working under the name and style of Basal Tools Company, Factory Area, Patiala, submitted its income-tax return for the assessment year 1968-69, completed on 31st August, 1967, to the concerned income-tax authorities on June 29, 1968. At the relevant time, the partnership concern had two partners, named, Shanti Lal Kapur and Subhash Kapur. The return was filed on behalf of the partnership concern by Shri Shanti Lal Kapur, its senior partner in age.

2. The income disclosed in the aforesaid return was Rs. 85,760. In the assessment order dated October 30, 1971, the income was raised to Rs. 2,64,680. In appeal, the income was reduced to Rs. 1,03,512. After reopening of the assessment proceedings, the assessee filed a revised return through Shri Suresh Kapur--its added partner ; added after the assessment year 1968-69 of the return. On September 30, 1980, the income was assessed at Rs. 1,99,990. Penalty of Rs. 45,593 imposed on February 24, 1983, was waived by the Commissioner of Income-tax (Appeals), Chandigarh, on July 31, 1984.

3. Alleging that the partnership concern and its three partners had fabricated false evidence by furnishing ina