SRIPAL SINGH KR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 66(2) of the Indian Income-tax Act, 1922, made by the Income-tax Appellate Tribunal, Allahabad, and the following question has been referred for our opinion;

(2.) THE dispute relates to the assessment for the year 1947-48. THE assessee is the karta of a Hindu undivided family and the original assessment for this year was made on a total income of Rs. 2,188. Subsequently, the Income-tax Officer received information that the assessee had made a fixed deposit of Rs. 40,000 on January 7, 1947, and inasmuch as the date fell within the financial year ending on. March 31, 1947 (which is the relevant accounting year), a notice under Section 34 was issued in respect of the year in question. THE explanation of the assessee in respect of an amount of Rs. 10,000 was accepted, and in respect of Rs. 30,000 was rejected, and the amount was included as income from an undisclosed source. On an appeal being filed, the Appellate Assistant Commissioner gave two notices for enhancement, and ultimately the amount of assessable income was enhanced. On appeal to the Tribunal, the enhancement made by the Appellate Assistant Commissioner was deleted, but the order of the Income-tax Officer was upheld. THE Income-tax Officer, thereafter, initiated proceedings under Section 28(1)(c) of the Act. THE assessee gave a written explanation to the notice on February 10, 1959, but the Income-tax Officer did not agree with the explanation and imposed a penalty of Rs. 6,620. On an appeal being taken to the Appellate Assistant Commissioner by the assessee, it was held that the department had not conclusively established that there had been concealment on the part of the assessee and he accordingly set aside the penalty. THE Income-tax Officer thereafter appealed to the Tribunal. THE Tribunal relying upon the order dated April 15, 1963, in I.T.A. No. 5955 of 1962-63 which was passed in the quantum appeal filed by the assessee held that the assessee was guilty of concealment but reduced the penalty to Rs. 2,000. THE Tribunal while allowing the appeal relied solely on the findings given by it in the quantum appeal that the assessee's explanation regarding the deposits was found to be false and that he had no bank account prior to 1947. It also relied upon the finding given in the quantum appeal that misleading information was given, namely, that the assessee did not want to mix up the zamindari income with the amount received from his relations while he had in fact done so. Following the decision of this court in the case of Lalchand Gopal Das v. Commissioner of Income-tax, [I963] 49 ITR 324 (All), it held that a penalty was leviable in respect of the concealment.