COMMISSIONER OF INCOME TAX Vs. MADHYA BHARAT TYRES

JUDGEMENT

(1.) THIS reference by the Tribunal, Indore Bench, under S. 256(1) of the IT Act, 1961 (hereinafter referred to as " the Act "), is made at the instance of the CIT, M.P. -I, Bhopal, whereby the following question of law has been referred for the opinion of this Court:

(2.) THE aforesaid reference has arisen in the following circumstances.

(3.) THE non -applicant assessee is a registered firm deriving income from sale of tyres, tubes and other motor parts. The original assessments for the asst. yrs. 1966 -67 to 1969 -70 were completed prior to October 19, 1974, on which date a search was conducted at the business premises of the assessee -firm from where certain books and other documents were seized by the IT Department. After the search, proceedings under S. 147(a) of the Act were initiated for all the assessment years aforesaid and accordingly notices were issued under S. 148 of the Act and the assessee filed revised returns for all the above years. On assessments being made by the ITO, the assessee was held to have concealed incomes in respect of each year of assessment and the ITO, therefore, issued penalty notices and referred the cases to the IAC under S. 274(2) of the Act, since the amount of income as determined by the ITO on assessment in respect of each assessment year exceeded the sum of Rs. 25,000. The aforesaid reference to the IAC under S. 274(2) of the Act was made by the ITO after April 1, 1976, on which date the Taxation Laws (Amendment) Act, 1975, whereby Sub -S. (2) of S. 274 of the Act was deleted, became effective. Sub -s. (2) of S. 274 before its deletion on April 1, 1976, read as under ;