COMMISSIONER OF INCOME TAX Vs. JOGIBHAI MANGALBHAI

JUDGEMENT

(1.) THERE are three questions of law referred to this Court by the Tribunal at the instance of the Department. They read thus :

(2.) THE assessee is an individual. The assessment year involved is 1969 70. Return of income for the year was filed on December 29, 1969, declaring total income of Rs. 5,801. However, in Part IV of the return, the assessee had declared three amounts totalling Rs. 4,09,677 as income exempt from tax being receipts by way of agricultural income, marriage chandla and cross word prize. The assessment was completed on January 31, 1972, under S. 144 of the IT Act, 1961, on a total income of Rs. 7,72,735. The additions included : Being of the view that the penal provisions of S. 271 were attracted, the ITO referred the proceedings to the Inspecting Asstt. CIT, under S. 274(2) of the Act, who, after allowing the assessee an opportunity of being heard, imposed a penalty of Rs. 8,00,000 by an order dated March 25, 1974.

(3.) THE question that arose before the Tribunal was whether, in a case like the one before it, the penal provisions of S. 271(1)(c) r/w or without the Explanation thereto were attracted. It was the case of the assessee that, apart from holding that the assessee's statements were not correct or that the assessee was not able to prove the correctness of his claim, the Department had not brought any material on record to suggest that the amounts in fact represented his income. Secondly, having shown the amounts in Part IV of the return, the assessee should be treated as having been exonerated from the penal provisions even if it was held that the assessee was otherwise liable to penalty under S. 271(1)(c). On behalf of the Department, the arguments advanced were that Part IV of the return would come to the assessee's help only if the statement made by the assessee was correct and it was only its legal implication which was not acceptable. In the present case, the Department had, after making full investigation, proved that the assessee's explanation was false.