1. This is reference at the instance of the Commissioner under section 66(2) of the Indian Income-tax Act, 1922. The following question has been referred :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalty of Rs. 20,000 imposed under section 28(1)(c) ?'
2. In our opinion, the question as farmed seems to suggest that sitting as a court of the appeal we can consider the propriety of the decision of the Tribunal in cancelling the levy of penalty on the assessee. Inasmuch as our jurisdiction is limited one, it becomes necessary to re-frame the question as follows :
'Whether, on the facts and in the circumstances of the case, the decision of the Tribunal in cancelling the penalty of Rs. 20,000 imposed on the assessee under section 28(1)(c) of the Indian Income-tax Act, 1922, was unreasonable or perverse ?'
3. The re-framed question in our opinion will bring out the true controversy which only can determined by us. The High Court in its reference jurisdiction under the Indian Income-tax Act does not sit in appeal over the decisions of the Tribunal on what are principally factual matter. However, if the decision of the Tribunal in such matters is one which is based on irrelevant considerations or if the Tribunal has taken a view which the High Court regards as an impossible one on the facts before it, then the decision may be regarded as perverse or so unreasonable as would required quashing even in the limited jurisdiction. The short question then which will arise for determination is whether the decision of the Tribunal in cancelling the levy of the penalty can be regarded as perverse or so unreasonable as would require quashing in our limited jurisdiction.
4. It is well settled that merely because the payment of Rs. 55,000 has been disallowed in the assessment proceedings of the assessee, it will not necessarily bring in its wake a levy of penalty. Section 28(1)(c) calls for levy of penalty only in cases where the assessee has concealed particulars of his income or deliberately furnished inaccurate particular of such income. In paragraph 9 of the statement of the case, the Tribunal has referred to various aspects of the case, which are prominently documentary by reason of which the Tribunal was constrained to hold in its order dated 23rd January, 1964, cancelling the levy of penalty, that the department had failed to prove that the assessee was guilty of the offence changed and that the assessee was required to be given the benefit of the doubt.
5. On the facts, which need not be set out, another view is possible; perhaps that view of the matter may be considered to be the better view inasmuch as two of the disallowed payments were purportedly made by bearer cheques and encashed by the assessee's employees. However, ever if we were to be of that opinion, it is not possible, in the facts and circumstances of the case, to say that the Tribunal's conclusion was perverse or so unreasonable that it cannot be upheld. The view taken by the Tribunal is a possible view on the fact; and if it is possible view, then, the answer to the question must be in favour of the assessee and against the revenue.
6. In the result, the re-framed question is answered in the negative and in favour of the assessee. The parties, however, will bear their own costs of this reference.