COMMISSIONER OF INCOME TAX Vs. ABDUL MAJEED T

JUDGEMENT

(1.) IN this petition by the Commissioner of INcome-tax (hereinafter referred to as "the petitioner"), the question which arises for consideration is whether any question of law arises out of the order of the INcome-tax Appellate Tribunal dated December 22, 1983, in INcome-tax Appeal No. 321 (Coch.) of 1982, made under section 254 of the INcome-tax Act, 1961 (hereinafter referred to as "the Act"). The question arises out of the facts set out in paragraphs Nos. 2 and 3 below. The assessee is hereinafter referred to as the respondent.

(2.) IN a search of the respondents premises made on January 12, 1977, the books of account including the stock register and inventories were seized by the petitioner. The respondent filed his income-tax return for the assessment year 1977-78 (accounting year ending on December 31, 1976) declaring an income of Rs. 85,200. An examination of the books of account of the respondent revealed that the value of the closing stock for the assessment year in question was Rs. 12,17,726. The respondent had declared the value of such stock to be Rs. 10,36,385. The respondents explanation of this discrepancy was this :

(3.) IN its literal meaning, "question" means an interrogative sentence soliciting an answer. It may be a query or an inquiry. But it is in the essence of a "question" that it presents a doubt and demands an answer. A question "arises" when such an interrogatory enquiry springs into view, rises or appears. The petitioner urged that the respondent, by declaring stock of lesser value, has "concealed" his income. The respondent offered the explanation set out in paragraph No. 2 above and urged that he did not. IN considering whether a question of concealment of particulars of income arises, the truth or otherwise of the respondents explanation is not relevant. Even there a question has been answered and was always answerable in favour of the respondent, the fact remains that the question does arise. We thought it necessary to distinguish between the existence of a question and the existence of an answer because the respondent, relying upon the proviso to Explanation 1 to sub-section (1) of section 271 of the Act urged that his explanation that bona fide, his failure to substantiate his explanation about the discrepancy in the value of the stock does not attract penalty. If the respondent, by reason of the bona fieds of his conduct, has, as he claims, a complete answer to the charge of concealment of income, the question may be answered in his favour. But the question does not cease to exit; indeed, the existence of an answer accentuates the presence of the question.