AMULDAS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference made by the Income-tax Appellate Tribunal referring for our answer the following question of law:

(2.) THE relevant assessment year is 1972-73. THE assessee during the the previous year relevant to the assessment year derived share income from three firms, namely, (1) M/s. Bhimandas & Co., Bhopal, (2) M/s. Karamchand & Bros., Bhopal, and (3) M/s. Moti Construction Co , Ahmedabad. THE assessee also derived income of Rs. 300 from house property. On 20th August, 1972, the assessee filed a return through his representative, Shri P. B. Sharma, Chartered Accountant. In this return the assessee's income was declared at Rs, 3,432 consisting of income from house property of Rs. 300 and income of Rs. 3,123 as share income from the firm, M/s. Bhimandas & Co. On 30th August, 1972, another return was filed by the assessee through his representative, Shri B. M. Vasanta, in which the share income from the firm, M/s. Karamchand & Bros., was shown. In this return the income from the firm, M/s. Bhimandas & Co. was not shown. THE ITO by his letter dated 23rd December, 1972, informed the assessee that it was found that he was a partner in M/s. Karamchand & Bros, the assessment of which had been completed and that he did not show the share income in the return filed by him. THE ITO called upon the assessee to explain why the share income from that firm be not included and why action for imposition of penalty may not be taken. THE assessee in his reply stated that he forgot by oversight to inform his counsel, Shri Sharma, about the share of profits from M/s. Karamchand & Bros. It was also stated that the case of the firm, M/s. Karamchand & Bros., was dealt with by another counsel, Shri B.M. Vasanta, Advocate, who filed the second return on 30th August, 1972, in which the share income from that firm was shown. THE assessee submitted that as two different counsel were dealing with the two firms, there was an inadvertent omission in disclosing in the first return the share income from the firm, M/s. Karamchand & Bros. A revised return was also filed on 1st January, 1973, in which the income from the two firms, M/s. Bhimandas & Co. and M/s. Karamchand & Bros., was shown. As regards the income from M/s. Moti Construction Co., it was stated that the return was subject to adjustment in respect of share of profit or loss from M/s. Moti Construction Co., intimation of which had not been received till then. THE ITO levied a penalty of Rs. 11,471 on the assessee for non-inclusion of the share income of M/s Karamchand & Bros, under Section 271(1){c). In appeal, the AAC reduced the penalty to Rs. 6,503. THE assessee and the Department both went up in appeal to the Tribunal which dismissed the appeal filed by the assessee and allowed the appeal of the Department.

(3.) THERE shall be no order as to costs of this reference.