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"1) Whether in view of the finding of the Tribuanl that failure to offer the provision for grtuity to tax was a case of human error and more so may be a silly mistake and further in view of the finding of the Tribunal that the Assessing Officer had also ignored to point out the same during the regular assessment, the Tribunal was justified in law in sustaining the penalty at the rate of 100% of the tax alleged to be evaded in the absence of any finding that there had been concealment of any income or furnishing of inaccurate particulars of income with an intention to evade tax ?

2) Whether the Tribunal was justified in law in confirming the imposition of penalty under Section 271(1)(c) of the Act to the extent of 100% in the absence of any finding that the assessee was guilty of any mens rea or deliberate intention to avoid the payment of tax ?"

Dr. Debi Pal, learned Senior Advocate appearing in support of the appeal contended before us that the learned Tribunal even after accepting the fact that there was a human error committed by the appellant, did not consider the question of imposition of penalty on the appellant to the extent of 100%. It is not in dispute that at the time of hearing before the Assessing Officer as well as before the Commissioner of Income Tax (Appeals), a penalty was imposed by the Assessing Officer at the rate of 300%, which was confirmed by the Commissioner of Income Tax (Appeals) by his order in the matter.

Dr. Pal strenuously urged before us that there is no reason of imposing such penalty on his client since, according to him, there is no question of attracting Section 271(1)(c) of the Income Tax Act, 1961 by the Assessing Officer, which was confirmed by Commissioner of Income Tax (Appeals). According to him, there was no wilful concealment by the assessee. He drew our attention to the statement which was filed along with the return and according to him the audit report under Section 44AB of the Income Tax Act, 1961 was duly filed and the statement of particulars which was required to be furnished under Section 44AB of the said Act was duly furnished by the assessee and it would be evident from Clause-17 of the said Audit Report that the assessee has specifically stated the provision for payment of gratuity was not allowable under Section 40A(7) of the said Act. Dr. Pal accordingly submitted that there is nothing on record which can show that there was a concealment in the return or the facts from the Assessing Officer was made by the assessee. He further pointed out that the learned Tribunal although accepted the position that it is nothing but a human error, but even then imposed the said 100% penalty on the assessee and on such ground the appellant has filed this appeal. According to Dr. Pal the said penalty cannot be sustainable in law since there is no evidence of evasion or concealment of tax by the appellant nor it can attract Section 271(1)(c) of the Act. He further drew our attention to Explanation-1 of the said section. At this stage, it is necessary for us to quote the relevant portion of Section 271(1)(c) of the Act, which reads as follows: