KAMAL CHAND JAIN Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE facts giving rise to the present appeal under s. 260A of the IT Act (hereinafter referred to as 'the Act') are that Sh. 1,00,880. Subsequently, the case was taken up for scrutiny under s. 143(3) with the approval of the competent authority. Notices were issued to the assessee and after providing opportunity to the assessee, the AO made an addition proceedings under s. 271(1)(c) of the Act were initiated by the same order, though separately. Vide his order dt. 21st proceedings on the surrender of the income of Rs. 3,77,950, it was held that the appeal was premature as no penalty had been imposed by that time. Subsequently, the order of penalty was passed against which the assessee again

(2.) THE Department preferred an appeal against the order of the first appellate authority which was dismissed (sic) by aside the order of the first appellate authority held as under :

(3.) IT was contended that no question of law arises from the order of the Tribunal and as such the appeal of the assessee should be dismissed. However, reference in this regard can be made to the judgment of the Supreme Court in the case of CIT vs. Scindia Steam Navigation Co. Ltd. (1961) 42 ITR 589 (SC), wherein it was held that where the Tribunal fails to deal with a question of law raised before it, it must be deemed to have been dealt with by it and is, therefore, one arising out of its order. Thus, we find no merit in the contention raised before us by the Revenue. While relying upon the judgment of the Supreme Court in the case of Sir Shadilal Sugar & General Mills Ltd. & Anr. vs. CIT (1987) 64 CTR (SC) 199 : (1987) 168 ITR 705 (SC), the CIT had formed an opinion that it was not a case for imposition of penalty under the provisions of s. 271(1)(c) of the Act. This finding arrived at by the first appellate authority was also based upon a finding of fact arrived at by the authority on the premises that surrender was made during the course of assessment proceedings and was not a direct consequence of detection of concealment by the Department. It was held to be a voluntary surrender. Even the explanation given by the assessee was found to be bona fide. The above conclusions of the CIT were disturbed by the Tribunal as already noticed. According to the Tribunal, it was a case of deemed concealment and even the explanation made by the assessee was not bona fide and it was the result of Department's detection that this amount could be made taxable. For this purpose, the reliance was placed on the judgment of this Court in the case of Electrical Agencies Corporation vs. CIT (2001) 171 CTR (Del) 521 : (2002) 253 ITR 619 (Del) and the judgment of the Supreme Court in the case of K.P. Madhusudhanan vs. CIT (2001) 169 CTR (SC) 489 : (2001) 251 ITR 99 (SC). 5. Reference to the order of the AO, at this stage, would be appropriate. It has been noticed by the ITO that the assessee was not able to offer any satisfactory explanation for the sum of Rs. 11,99,242.54 in regard to its source. On he submitted a letter stating that he was not aware of his tax affairs. Unable to get any proper explanation from the assessee, the ITO added the said amount of Rs. 3,77,950 and specifically recorded his opinion in that regard which reads as under :