KANUBHAI N AMIN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE applicant has suggested the following question of law seeking a direction on the Tribunal to forward the statement of case in respect thereof under S. 256(2) of the IT Act, 1961: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the levy of penalty of Rs. 93,310 under S. 271(1)(a)?"

(2.) LEARNED counsel appearing for the applicant has taken us through the relevant material on record and submitted that, since a reference is pending from the quantum proceedings, the Tribunal ought to have allowed the reference even from the penalty proceedings under S. 271(1)(a) of the Act so that when the question gets resolved and if the assessee succeeds in the reference relating to the quantum proceedings, then he can get the benefit of that result in the penalty proceedings.

(3.) IN this case, as can be seen from the order of the Tribunal, there is a finding that the assessee was exercising control over the funds in question and held dominion over the same. The Tribunal noted that the assessee had collected Rs. 33,56,000 upto 31st March, 1984, and returned only Rs. 4,44,683 to the parties. Out of the balance of Rs. 29,11,317, Rs. 5,83,000 was given to M/s Bhagyodaya Builders. Thereafter, the assessee had a balance of approximately Rs. 23,30,000 available, over which according to the Tribunal, it exercised control and had dominion. The Tribunal further held that it was under these circumstances that the assessee himself had filed a revised estimate of advance tax showing his estimated income of Rs. 35,000 which was definitely above the taxable limit. The Tribunal also held that nothing was produced before it to show that this estimate of Rs. 35,000 was a wild guess only and the assessee did not know that this was not his income. The Tribunal held on these facts that the assessee very well knew he was having income above the taxable limit and, therefore, he was bound to file the return of income in time. The assessee therefore, without reasonable cause failed to furnish the return of total income in the prescribed time. The Tribunal, therefore, confirmed the penalty levied on the assessee under S. 271 (1)(a) of the Act.