Per G. Santhanam, Accountant Member - These appeals are by the assessee in relation to the assessment years 1979-80 and 1980-81 against the orders of the CIT (Appeals) in sustaining the levy of penalty under section 271(1)(c) of the Income-tax Act, 1961. The previous year of the assessee is the financial year for each of the assessment years. In the return filed for the assessment year 1979-80 on 27-9-1979, the assessee admitted income totalling Rs. 22,940 from house property, own business in prawn- fishing and share income from the firms in which he was a partner and the assessment was completed under section 143(1) of the Income-tax Act on 29-9-1979. Subsequently, a notice under section 143(2) of the Act was issued to the assessee asking for certain details. In the meanwhile, on 29- 1-1982 a search under section 132 was conducted in the residential and business premises of the assessee and certain documents and books of account were seized. No cash, jewellery or valuable articles or things were found. A letter was is sued on 4-2-1982 posting the case for further hearing to 18-3-1982 together with a notice under section 142(1) of the Act. There were adjournments of the hearing also at the request of the assessee. In the meanwhile, on 18-3-1982 the assessee had filed a return purported to be a revised return showing income from other sources at Rs. 50,000 without any details. The case was finally heard on 23-3-1982 and a draft assessment order was passed. The assessee filed his objections and the inspecting Assistant Commissioner after hearing the assessee and the Income-tax Officer issued his directions which were incorporated in the assessment order dated 6-11-1982. This is for the assessment year 1979-80.

2. For the assessment year 1980-81, the assessee had filed a return declaring income of Rs. 16,340 and notice under section 143(2) was served on the assessee. Certain details were called upon in the course of the personal hearing. In view of the search under section 132 on 29-1-1982 wherein certain books of account and documents were seized, the assessee was asked to explain the transactions as noticed in the books of account or documents. A draft assessment order dated 22-3-1983 was served on the assessee. The assessee submitted his objections and the inspecting Assistant Commissioner of Income-tax after hearing the assessee and the Income-tax Officer gave his directions dated 16-8-1983 on the draft assessment order. The directions were incorporated in the final order of assessment dated 16-3-1982. This is for the assessment year 1980-81.

3. In all these assessments, certain additions were made based on the seized materials. The additions that were finally sustained by the Tribunal in the quantum appeal were as follows:

On the basis of the above, the Income-tax Officer proposed to levy penalty under section 271(1)(c) to which the assessee objected stating that it has not been established that the assessee had concealed the particulars of income or furnished inaccurate particulars of income in respect of toddy business in Alwaye range and Archana Jewellery. The presumptions available under section 132(4A) of the IT Act. 1961, cannot be extended to penalty proceedings. As for the non-inclusion of the income of the minor children it was submitted that it was an accidental omission and that Silpi Movies in which the minor children were admitted to the benefits of partnership did