COMMISSIONER OF INCOME TAX Vs. LA MEIDCA

JUDGEMENT

(1.) THE Tribunal has referred, under S. 256(1) of the INCOME TAX ACT, 1961, the following questions of law in respect of the asst. yrs. 1964 - 65 to 1967 -68 :

(2.) BRIEFLY stated, the facts are that, in respect of the said assessment years, the assessments were completed by the ITO. Sub - sequently, a raid was conducted on the premises of the assessee under S. 132(1) of the IT Act and certain documents were seized. Before any further proceedings could be taken pursuant to the said raid, the Voluntary Disclosure Act of 1976 was promulgated. Taking advantage of this Act, the assessee filed disclosure under S. 14(1) disclosing concealed income of Rs. 50,000 in each of the said assessment years. The assessee, however, did not pay the tax in terms of the said provision with the result that he did not get immunity from imposition of penalty as contemplated by S. 14(5) of the Act.

(3.) BECAUSE the assessee did not pay the requisite tax, he could not get the benefit of the immunity contemplated by S. 14(5) from the levy of penalty and the IAC then proceeded to take recourse to the provisions of S. 271(1)(c) r/w S. 274 of the IT Act. Notices were issued to show cause why penalty should not be imposed. In reply to the said notices, the assessee stated that full tax had been paid under the voluntary disclosure scheme and, therefore, no penalty was leviable. This was found to be factually incorrect because full tax had not been paid and the IAC. levied penalties of Rs. 4,600, Rs. 6,083, Rs. 6,921 and Rs. 7,150 for the asst. yrs. 1964 -65 to 1967 -68, respectively.