Section 271(1)(c) Penalty cannot be imposed in absence of Disallowance

Indermal Manaji Vs CIT (Bombay High Court)

The basis for initiation of assessment proceedings by the assessing officer is that the assessing officer disbelieved the claim of the assessee that he was engaged in the business of discounting drafts, whereas the Tri­bunal held that the assessee carries on the business of draft discounting. The assessee has stated that the amount in the account is the amount of the drafts received of which the assessee charges Re. 1 per thousand as commission. Explanation 1 to sect

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