GOPICHAND SARJUPRASAD Vs. UNION OF INDIA

JUDGEMENT

(1.) BY this application under Articles 226 and 227 of the Constitution the petitioner M/s. Gopichand Sarju-prasad, a registered partnership firm, seeks a writ of certiorari for quashing an order dated 5th January 1966 of the Inspecting Assistant Commissioner of Income-tax, Jabalpur, imposing on the petitioner a penalty of Rs. 25000 under Section 271 (i) (c) of the Income-tax Act, 1961 (hereinafter referred to as the Act), for concealing income and deliberately furnishing inaccurate particulars of the same for the assessment year 1959-60. The order of the Inspecting Assistant Commissioner was upheld in appeal by the Appellate Tribunal, Allahabad, and a writ of certiorari has been sought for quashing the Tribunal's order also.

(2.) THE material facts are that for the assessment year 1959-60 the petitioner filed a return of its income under Section 22 (2) of the Income-tax Act, 1922, on 21st October 1959 showing an income of Rs. 7,896. THE assessee took forest contracts. It ran a saw-mill and also manufactured and sold furniture. It also did stone quarrying business. In the assessment proceedings the Income-tax Officer noticed some discrepancies in the accounts and registers maintained by the assessee of its business and called upon the assessee to explain the discrepancies and furnish certain particulars. THEreupon, the assessee filed a revised return of its income on 17th January 1964 disclosing its total income as Rs. 50,605. THE Income-tax Officer finalized the assessment on 19th March 1964 on a total income of Rs. 84.475 after taking into consideration the revised return and issued a notice to the petitioner under Section 271 (1) (c) of the 1961 Act for concealment of income. As the minimum penalty imposable on the petitioner exceeded Rs. 1,000 the Income-tax Officer referred the matter to the Inspecting Assistant Commissioner of Income-tax under Section 274 of the Act.

(3.) IN order to understand the petitioner's objections it is first necessary to refer to the material provisions of the 1961 and 1922 Acts. Sub-section (1) of Section 297 of the 1961 Act repeals the 1922 Act; then Sub-section (2) enumerates the "savings". That sub-section, so far as it is material here, is as follows:--