COMMISSIONER OF INCOME TAX Vs. ROWTHER BROTHERS

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Cochin Bench, has sent up a statement of the case and referred the following question of law for our opinion, viz. :

(2.) THE assessee was doing business in foodgrains, tobacco and rubber. THE assessment year with which we are concerned is 1969-70, the accounting year being the financial year 1968-69 ending with 31st March, 1969. On an examination of the accounts, the ITO found two credits in the folio opened for M/s. Kottayam Rubber Company to the following effect :

(3.) THE section has been amended with effect from April 1, 1976. But as the amendment is immaterial for the purposes of this case, we are leaving it out. THE order of imposition of the penalty with which we are concerned is dated November 15, 1973. It would be noticed that under the section all that is required for the imposition of a penalty under Clause (c) of Sub-section (1) of the section is that the officer concerned must be satisfied that any person has concealed the particulars of his income, or has furnished inaccurate particulars of such income. In other words, for the purposes of Clause (c), there is no need to find any failure to furnish a return or failure to comply with a notice, etc., which are the necessary ingredients under Clauses (a) and (b). Again in the matter of computation of penalty under Clauses (a) and (b)it would be seen that under the Sub-clauses, (i) and (ii) after Clause (c), the penalty imposed is geared to the tax payable or avoided; whereas in the case referred to under Clause (c), it is not necessarily geared to the tax payable, but is in addition to any tax payable (if no tax is payable this will not enter the reckoning), an amont not more than twice the amount of the income concealed or the inaccurate particulars furnished. With this analysis of the section and its ingredients, it seems to us that the Tribunal was wrong in its reasoning that even if the concealed income were to be added, the resultant figure would 'only fall below the assessable limit for a registered firm and things of the kind. THEse are immaterial for the purpose of Clause (c). Counsel for the revenue cited the decision of a Division Bench of this court in CIT v. India Sea Foods [1976] 105 ITR 708 (Ker). THE Division Bench observed (p. 716):