B. S. Dhillon, J.
1. The assessment year in dispute is 1963-64. Shri Vidya Sagar and Shri Anand Sagar had 50% share each in the firm, M/s. Shazada Hosiery Mills. They filed their returns of income on 21st February, 1964, Anand Sagar declaring his share income to be Rs. 34,779 and Vidya Sagar declaring his share income to be Rs. 34,849. Income from the house property was declared to be the same as for the assessment year 1962-63. Later on, the said partners-assessees furnished revised returns on 26th March, 1968, but the share income from the said firm was not quantified in these returns. In response to the notice from the ITO, the partners-assessees stated on 27th March, 1963, that their share incomes from the firm may be determined in the light of the firm's income to be found on the firm's assessment. During the proceedings for the assessment of the income of the concerned firm, the mistake of Rs. 1,00,000 in a certain totalling had been detected by the ITO before 26th August, 1968, when the partners-assessees filed their revised returns. In the case of Anand Sagar, the ITO held Rs. 91,153 to be his share income and Rs. 94,120 to be his total income. In the case of Vidya Sagar, the ITO held Rs. 91,223 to be his share income and Rs. 94,727 to be his total income.
2. The said assessments, on appeal, were confirmed by the AAC.
3. The ITO being of the view that the two assessees had concealed particulars of their share income, made references to the IAC under Section 274(2) of the I.T. Act, 1961 (hereinafter referred to as the Act). The IAC initiated penalty proceedings against both the assessments on the ground of concealment of particulars of income earned by them by way of share income from the aforesaid firm. Separate show-cause notices were served on the two assessees on 31st December, 1969. After hearing the assessees, the IAC imposed, under Section 271(1)(iii) of the Act, a penalty of Rs. 21,100 on Vidya Sagar and a penalty of Rs. 20,600 on Anand Sagar. These penalties in each case reflected 50% of the tax that would have been avoided if only the incomes declared in the original returns had been taxed.
4. On appeal, the Appellate Tribunal confirmed the finding that the penalty for concealment of particulars of income was exigible in each case but reduced the penalties from 50% to 30% of the tax that would have been, in each case, avoided. The Tribunal held that though there was a conscious attempt at concealment of or inaccurate furnishing of income particulars, the said attempt was by way of transfer of profits from one year to another inasmuch as the correct income of the firm in question had been disclosed in the returns filed in August, 1964, for the assessmentyear 1964-65. This circumstance was held to be an ultimate factor in determining the penalty to be imposed. On a reference application being made on behalf of the revenue, the following question of law has been referred to this court for its opinion :
' Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in reducing the quantum of penalty having been satisfied that the offence of concealment was there without any doubt '
5. After hearing the learned counsel for the parties, we are of the opinion that the question of law referred to us has to be answered in the affirmative, i.e., in favour of the assessee and against the revenue. The Legislature has fixed the minimum and maximum penalty leviable in the case of concealment of income. The quantum of penalty has to be levied by the authorities under the Act keeping in view the particular facts and circumstances of each case. The finding of the Tribunal, that there is one mitigating circumstance that the amount of Rs. 1,00,000 was not totally concealed but was merely transferred from one year to another, is one of the relevant considerations for considering the quantum of penalty to be imposed. We do not consider that the Tribunal fell in error in taking into consideration this fact while reducing the penalty from 50% to 30% of the tax sought to be avoided.
6. For the reasons recorded above, we answer the question referred to this court, accordingly. There will be no order as to costs.