Commissioner Of Income-Tax vs Mool Chand Siri Kishan Dass
2000 Latest Caselaw 1102 Del

JUDGMENT

Arijit Pasayat, C.J.

1. Pursuant to an order dated November 22, 1979, in I.T.C. No. 51 of 1978 under Section 256(2) of the Income-tax Act, 1961 (in

short "the Act"), Income-tax Appellate Tribunal, Delhi Bench-D (in short "the Tribunal"), has referred the following question for the opinion of this court :

"Whether, on the facts and in the circumstances of the case and having regard to the fact that the assessee agreed to be assessed on an income of Rs. 20,900, the Tribunal was right in holding that a penalty under Section 271(1)(c) could not be imposed ?"

2. The assessee filed a return of income from salary at Rs. 1,800. Action was taken under section 34 of the Indian Income-tax Act, 1922 (in short "old Act"), and reassessment was completed on August 28, 1958, for the assessment year 1954-55, which was set aside by the Appellate Assistant Commissioner (in short "the AAC"), vide order dated November 6, 1959. While making a fresh assessment, the Assessing Officer made inquiries into the business activities of the assessee who ultimately agreed for assessment on a total income of Rs. 20,900 as per the endorsement in the order sheet of the Assessing Officer, dated February 7, 1973. The Income-tax Officer initiated penal proceedings and imposed penalty. In appeal, the Appellate Assistant Commissioner upheld the decision of the Assessing Officer. The matter was carried in appeal before the Tribunal which held that merely because there was an agreement for assessment at a particular figure that did not per se bring in the concept of concealment. On the merits it was held that the Revenue did not prove concealment which would enable it to levy penalty under Section 271(1)(c) of the Act. The assessment order, as noted above, was passed on April 5, 1955.

3. We have heard learned counsel for the parties.

4. Though it was submitted by learned counsel for the Revenue that Explanation added to Section 271(1)(c) with effect from April 1, 1964, applies, we do not find any substance. In fact the return was filed much earlier to April 1, 1964, and reassessment was completed on August 28, 1958, which again was set aside by the Appellate Assistant Commissioner on November 6, 1959. That being the position, the Tribunal was correct in its view that the Revenue was required to prove concealment. Accordingly, we answer the question referred in the affirmative, i.e., in favour of the assessee, and against the Revenue.

5. The reference stands disposed of.