MONORANJAN MUKHERJEE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This reference under Section 256(1) of the I.T. 1961, is at the instance of the assessee.

(2.) The assessee filed a return on February 16, 1968, for the assessment year 1966-67, showing an income of Rs. 15,944. The ITO completed the assessment on December 31, 1970, on a total income of Rs. 68,525 which was inclusive of Rs. 38,464 added as income from undisclosed sources. The addition of Rs. 38,464 was made on the basis that the sum of Rs. 38,464 credited in the assessee's books of account as proceeds realised by the sale of goods, in fact, represented the assessee's income from undisclosed sources. With reference to the above addition and some other additions made in the assessment, the ITO initiated penalty proceedings against the assessee and referred the matter to the IAC for further action. In the appeal preferred by the assessee, the AAC reduced the aforementioned addition of Rs. 38,464 to Rs. 31,464. The impugned order of penalty was passed by the IAC after the disposal of the appeal against the order of assessment by the AAC.

(3.) Rejecting the explanation offered by the assessee, the IAC held that the ITO examined the accounts thoroughly and could discover the suppression of opening stock and of the purchases made during the year and was able to detect concealment in the real sense. Thus, holding that the assessee had concealed the particulars of his income, for which penalty was leviable under Section 271(1)(c), the IAC imposed a penalty of Rs. 10,000.