COMMISSIONER OF INCOME TAX Vs. TATAVARTHY NARAYANAMURTHY

JUDGEMENT

(1.) AN assessment order was passed on 29th August, 1949, by the Income-tax Officer, Masulipatam, for the assessment year 1949-50 whereby the assessee, a Hindu undivided family, consisting of Tatavarthi Narayanamurthy and his sons, was assessed on a total income of Rs. 48,413 and directed to pay a tax of Rs. 12,537.07. This order was confirmed on appeal by the Appellate Assistant Commissioner of Income-tax, Vijayawada, by his order dated March 5, 1951 and the Income-tax Appellate Tribunal also dismissed the appeal preferred from the order of the Appellate Assistant Commissioner.

(2.) BEFORE completing the assessment, proceedings under Section 28(1)(c) of the Income-tax Act were started against the assessee and as the Income-tax Officer found that the assessee had deliberately suppressed true particulars of the income, he levied a penalty of Rs. 6,000 on the assessee with the previous approval of the Inspecting Assistant Commissioner of Income-tax. This order was passed on the 4th November, 1957.

(3.) THE Appellate Assistant Commissioner in his order dated November 29, 1958, held that though the document of partition was executed on October 31, 1957, the house properties were sought to be divided on November 6, 1957, and the documents were registered on November 21, 1957. He was of the view that the division of the house properties could be effective only after registration of the document and, therefore, the family continued to exist till November 27, 1957. In the circumstances, he held that the levy of penalty on the family on November 4, 1957, was legal. On the merits, he came to the conclusion that the penalty of Rs. 6,000 actually imposed by the Income-tax Officer was quite reasonable.