BOMBAY HARDWARE SYNDICATE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) TWO questions have been referred to us for our opinion in relation to the proceedings for imposition of penalty on an assessee to income-tax for the year 1958-59. The questions read as follows :

(2.) THE essential facts for disposing of this reference may be stated thus : In the assessment proceedings it was found that the income returned by the assessee did not represent its true income and, therefore, the Income-tax Officer made an estimate of the income of the assessee. THE amount fixed as the income, which had not been returned by the assessee, by the Income-tax Officer, was reduced in appeal by the Appellate Assistant Commissioner and further reduced in the appeal before the Tribunal. THE Tribunal fixed the amount to be added to the income returned by the assessee at Rs. 50,000. That was the end of the assessment proceedings. But that did not end the troubles of the assessee, for, proceedings were initiated under Section 28(1)(c) of the Indian Income-tax Act, 1922. For the imposition of penalty, the Income-tax Officer went into the question of concealment and came to the conclusion that there had been concealment of income on the three grounds mentioned in his order. He fixed the penalty to be imposed at Rs. 45,900, after finding that the maximum penalty that could be imposed was Rs. 66,817. It is not clear how this figure of Rs. 66,817 has been arrived at as the maximum penalty imposable on the assessee. In the appeal taken by the assessee before the Appellate Assistant Commissioner, the order of the Income-tax Officer was upheld. THE assessee appealed again before the Tribunal and the Tribunal, after holding that the three grounds mentioned by the Income-tax Officer and the Appellate Assistant Commissioner had been established, came to the conclusion that the penalty to be imposed was not 100% but only 30%. This has resulted in the imposition of a sum of Rs. 13,500 as penalty on the assessee. It is in the light of these facts that the questions that have been referred to us have to be determined.