GIRDHARILAL SONI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Two questions of law have been referred to this court under Section 256(2) of the Income-tax Act, 1961 :

(2.) The assessment year involved is the assessment year 1968-69 for which the previous year ended on October 31, 1967. The facts of the case found by the Tribunal have been stated as under : The assessee filed his return on June 3, 1968, declaring a total income of Rs. 23,576. During the course of assessment proceedings, the Income-tax Officer enquired of the assessee the nature and source of Rs. 25,000 being a loan alleged to have been taken by the assessee in the name of Eastern Industries Corporation. The Income-tax Officer treated Rs. 25,000 as the assessee's income from business in his order of March 14, 1972, the relevant portion of which reads as under :

(3.) The Income-tax Officer framed the assessment on a total income of Rs. 76,718. Simultaneously, he initiated penalty proceedings under Section 271(1)(c) of the Act and referred the matter to the Inspecting Assistant Commissioner as the minimum penalty imposable under that section exceeded Rs. 1,000. The Inspecting Assistant Commissioner, after noticing that the aforesaid addition was upheld by the Appellate Assistant Commissioner and that no further appeal was preferred by the assessee against the said order of the Appellate Assistant Commissioner, came to the conclusion that the assessee had concealed the particulars of his income and, therefore, the provisions of Section 271(1)(c) of the Act were clearly attracted in his case. He, accordingly, imposed a penalty of Rs. 32,500.