JUDGMENT 1. The Income Tax Appellate Tribunal has referred the following two questions of law arising out of its order dated August 16, 1994, pertaining to the assessment year 1990-91 : "1. Whether the Income Tax Appellate Tribunal was right in holding that the Explanation under Section 271(1)(c) of the Income Tax Act could be invoked at any stage even if no show cause notice had been issued under the said Explanation and the assessee had no opportunity of meeting the Department's case under the said Explanation ? 2. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in upholding the levy of penalty on the ground that the assessee's explanation as to the expenditure on repairs and maintenance claimed by it was not bona fide and that all the facts relating to the same and material to the computation of its income had not been disclosed by it, without appreciation of the material evidence produced by the assessee ?" 2. The assessee is a firm. The assessee filed its return of income for the year 1990-91 on August 27, 1990, declaring a total income of Rs. 48,361. The assessment was, however, completed on March 31, 1991, under Section 143(3) at the figure of total income of Rs. 8,46,361 making the following additions : Rs. (i) Addition made on account of disallowance out of expenses claimed under the head " Theatre repairs and maintenance & quot; 7,00,000 (ii) Addition made on account of disallowance out of the claim of vehicle maintenance expenses 1,00,000 Total 8,00,000 3. It is required to be mentioned that the business of the assessee is to run a cinema theatre named Prasanna Theatre. In the first appeal before the Commissioner of Income Tax (Appeals), the first addition as above was reduced to Rs. 6 lakhs whereas the second addition as above was again reduced to Rs. 85,000. The penalty proceedings under Section 271(1)(c) were initiated by the Assessing Officer for concealment of income and furnishing of inaccurate particulars in respect of the abovementioned amount of Rs. 6,85,000. Ultimately, penalty of Rs. 3,47,110 was levied by the Assessing Officer at the minimum level. 4. The appeal filed by the assessee before the Commissioner of Income Tax (Appeals) was dismissed on the facts of the case. The assessee came up in further appeal before the Income Tax Appellate Tribunal. 6,85,000. Ultimately, penalty of Rs. 3,47,110 was levied by the Assessing Officer at the minimum level. 4. The appeal filed by the assessee before the Commissioner of Income Tax (Appeals) was dismissed on the facts of the case. The assessee came up in further appeal before the Income Tax Appellate Tribunal. A legal issue was raised by the assessee before the Income Tax Appellate Tribunal that the imposition of penalty under Section 271(1)(c), by resorting to the provisions of Explanation 1 to the said section without giving notice, was illegal. It was argued that as a result of the above action on the part of the Assessing Officer, the assessee had no opportunity to meet the case of the Department. Reliance was placed on the decision in the case of Commissioner of Income Tax Vs. P.M. Shah, (1993) 203 ITR 792 Bom. 5. The Tribunal, on the basis of the facts of the case, came to the conclusion that there was concealment of income and upheld the imposition of penalty but directed that the computation of penalty amount be restricted to the disallowance of Rs. 2,75,720 as sustained by the Income Tax Appellate Tribunal in the quantum appeal. So far as the disallowance with regard to the vehicle maintenance expenditure, the Tribunal held that although the disallowance in that regard had been sustained at Rs. 75,000, the said disallowance was mainly on the ground of absence of supporting vouchers/receipts relating to the expenses and, hence, the provisions of Section 271(1)(c) could not be said to be applicable to such disallowance. 6. By filing a miscellaneous petition, the assessee tried for amendment of the order of the Tribunal. It was the contention of the assessee in the said petition that in the Tribunal's order with regard to the penalty matter, various evidence submitted by the assessee in its paper book supplying detailed information about repair expenses, etc., were not taken into consideration. During the course of the hearing of the miscellaneous petition, it transpired that on account of the fact that in the earlier order of the Tribunal in the quantum appeal, such evidence submitted by the assessee had not been mentioned and that is why in the later order relating to the penalty (under present consideration) also, the said evidence were not mentioned. As per the prayer of learned counsel for the assessee, the Tribunal ordered that a copy of the miscellaneous petition itself be annexed to the order of the Tribunal and that the said annexure should also form a part of the order of the Tribunal. 7. The submission Of learned counsel for the assessee is that in the notice which has been issued there was no mention of the Explanation. It is not pointed out as to whether Clause (a) is applicable or Clause (b). Thus, the assessee was not in a position to submit the reply. Reliance is placed on the judgment given in the case of Commissioner of Income Tax Vs. P.M. Shah, (1993) 203 ITR 792 Bom where it was considered that it is essential that the assessee must be informed that the penalty proceedings are commenced under the Explanation to Section 271(1)(c). 8. We have considered over the matter. 9. In the copy of the show-cause notice issued, it is mentioned as to why the order imposing-penalty should not be made under Section 271 of the Income Tax Act, 1961. It is not the case of the assessee that any other explanation was applicable or that he was not able to understand the notice. After service of the notice, the reply was filed and prayer was made that the matter may be kept pending till the decision by the Income Tax Appellate Tribunal, which was not accepted. Explanation 1 to Section 271(1)(c) contemplates the amount added or disallowance made by a deeming fiction to represent the income in respect of which particulars have been concealed. The Legislature has cast the burden on the assessee. In the appeal preferred before the Commissioner of Income Tax (Appeals) no such ground was taken, as such it cannot be considered that any prejudice has been caused to the assessee. Even a wrong mention of the section in a notice does not vitiate the proceedings. If in the notice issued Explanation 1 is not mentioned and the entire Section 271 is mentioned, the assessee could have submitted to the assessing authority that he is not able to understand as to what charge is framed against him. Nothing of the sort was done. As such we do not consider any prejudice was caused or it was necessary for the Income Tax Officer to mention the Explanation in the notice issued. Nothing of the sort was done. As such we do not consider any prejudice was caused or it was necessary for the Income Tax Officer to mention the Explanation in the notice issued. The Tribunal was right in holding that the Explanation under Section 271(1)(c) of the Income Tax Act could be invoked at any stage even if no show cause notice had been issued under the said Explanation and the assessee had no opportunity of meeting the Department's case under the said Explanation. 10. The first question is therefore answered in favour of the Revenue and against the assessee. 11. In respect of the second question, it is the contention of the assessee that the Tribunal without examining the material produced before the authorities below, has passed the order on the merits. In penalty proceedings, the assessee is entitled to show that he has not committed the offence and for that purpose even fresh evidence could be submitted. The evidence which was already submitted before the assessing authority and was not considered by the Tribunal was sought to be challenged by way of miscellaneous application. The Tribunal should have considered the same. In these circumstances, we feel that the matter requires re-examination by the Tribunal of the material which was already on record before the assessing authority and then to pass the order regarding levy of penalty under Section 271(1)(c). Without considering the material, the Tribunal was not justified in upholding the levy of penalty on the ground that the assessee's explanation as to the expenditure on repairs and maintenance claimed by it was not bona fide and that all the facts relating to the same and material to the computation of its income had not been disclosed by it, without appreciation of the material evidence produced by the assessee. 12. Accordingly, the second question is answered in favour of the assessee and against the Revenue.