RAVI BROTHERS Vs. COMMISSIONER OF INCOME TAX 1

JUDGEMENT

(1.) Pursuant to the direction given by this Court in an application under Section 256(2) of the Income-tax Act, 1961 (in short 'the Act'), Income-tax Appellate Tribunal Delhi Bench-D ('Tribunal' in short) has referred the following question for opinion of this Court;

(2.) Factual position, as noted in the statement of case, is as follows; Assessee, a partnership firm, consisted of four partners with 25% share each. Its business was of selling steel pipes and tubes etc. with its head office at Delhi and branch at Calcutta. For the assessment year in question previous year ended on Diwali, 1970. Assessee had filed its return on 20th July, 1971 declaring an income of Rs.4,64,890.00. Assessment was completed on a total income of Rs.7,50,682.00. Assessee preferred appeal to the Appellate Assistant Commissioner of Income-tax ( 'AAC' in short). 'Said authority granted partial relief to the assessee and total income was reduced to Rs.6,05,877.00. Before completion of assessment. Income-tax Officer initiated penalty proceedings under Section 271 (1)(c) of the Act and referred the matter to the Inspecting Assistant Commissioner ('IAC' in short) under Section 274(2) of the Act, as the amount in respect of which income had been concealed or inaccurate particulars of such income had been furnished exceeded Rs.25,000.00. IAC, after issuing show cause notice to the assessee and after considering assessee's objections in the show cause I reply and written submissions filed from time to time held that assessee had concealed its income and/or furnished inaccurate particulars of income to the extent of claim of interest amounting to Rs.61,181.00. Accordingly it was held that penalty under Section 271(1)(c) was leviable. IAC took note of the fact that the main addition made in the assessment order was disallowance of Rs.61,181.00 representing interest on alleged loans from agriculturists, which the assessee had also accepted. Making a reference) to the assessment order made for the assessment year 1956-57, it was held that assessee was guilty of concealment of income. The acceptability of alleged loans from agriculturists was dealt with in the assessment orders for several years i.e. 1956-57 onwards. Therefore, minimum penalty of Rs.61,181.00 was .levied. Matter was carried in appeal before the Tribunal. Four appeals were dealt with by the Tribunal together. Three of them relate to the assessments made for the assessment years 1967-68 to 1969-70 while fourth one related to the case at hand. Tribunal noticed that after it was brought to assessee's notice that so-called loans were not genuine, assessee surrendered, after being cornered. Not only that, assessee had introduced the amounts in question in its books accepting it to be belonging to the firm or its partners. That being the position, there being no scope for claiming interest on the so-called loans and rightly, therefore, it has been held that there was concealment of income or furnishing of inaccurate particulars of its income. Accordingly, levy of penalty was upheld Prayer was made for reference under Section 256(1) of the Act which was rejected. However, on being moved, as noted above, direction was given by this Court for referring the question as set out above for opinion of this Court.

(3.) We have heard learned counsel for Revenue. There is no appearance for assessee in spite of notice. Learned counsel for Revenue submitted that after analysing the factual position in detail. Tribunal has concluded that penalty was clearly leviable. That being the position no question of law arises out of the order of the Tribunal.