COMMISSIONER OF INCOME TAX Vs. POPULAR LUNGHI COMPANY

JUDGEMENT

(1.) IN pursuance of the directions given by this Court, the tribunal referred the following two questions of law for our opinion: "1. Whether, on the acts and in the circumstances of the case and having regard to the provisions of Explanation to s. 271 (1) (c) of the IT Act, 1961, the penalties levied under s. 271 (1) (c) of the IT Act were rightly cancelled by the Tribunal for the asst. yrs. 1970-71 to 1973-74 in the assessee's case" 2.Whether, on the facts and in the circumstances of the case, Tribunal's view that the disclosure of information by the assessee was voluntary, is based on valid and relevant materials and is sustainable in law""

(2.) THE assessee is a partnership firm of three partners and in the asst. yrs. 1970-71 to 1973-74 the assessee-firm was mainly engaged in the business of kailies and lungies. THE details of the income returned and assessed for the asst. yrs. 1970-71 to 1973-74 are as under: Income Asst. yr. Date of filing Returned Assessed of the return (Rs.) (Rs.) 1970-71 24. 1. 1972 2, 57, 937 5, 87, 200 1971-72 25. 3. 1972 3, 47, 022 4, 32, 020 1972-73 19. 8. 1972 1, 39, 458 2, 99, 858 1973-74 16. 8. 1973 1, 30, 730 2, 09, 810 THE difference between the income returned and income assessed for the four assessment years mainly arose due to inclusion of the income in moneylending business, which was omitted to be disclosed by the assessee. THE income so included for the various assessment years are as under: Asst. yr. Income from moneylending business. (Rs.) 1970-71 85, 000 1971-72 85, 000 1972-73 1, 51, 400 1973-74 77, 900

(3.) THE learned standing counsel further submitted that in the original returns filed by the assessee for the assessment years under consideration, the income from the moneylending business was not disclosed. THE assessee came forward with the settlement petition only after the search was conducted and concealment was found out with regard to the moneylending income. THErefore, according to the learned counsel there is concealment of income in the returns filed by the assessee and the burden is on the assessee to prove that there is no concealment in not disclosing the income arising from moneylending business. According to the learned counsel, the assessee has not discharged the burden placed on it. THErefore, the Tribunal was not correct in cancelling the penalty levied under s. 271 (1) (c) of the Act for the assessment year under consideration.