COMMISSIONER OF INCOME TAX Vs. MADHAB RAM BORA

JUDGEMENT

(1.) IN this reference the following question of law has been referred to, this court by the INcome-tax Appellate Tribunal, Gauhati Bench, under Section 256(1) of the INcome-tax Act, 1961, hereinafter referred to as " the Act " :

(2.) THE facts of the case appearing from the statement of the case may be briefly stated as follows. THE assessee is a contractor whose income has been estimated in the past by applying a rate of net profit. No regular accounts have been maintained by the assessee but the details of receipts from the various contract works were being submitted before the department for assessment. THE relevant assessment year is 1964-65. In this assessment year the assessee filed a return showing his income at Rs. 13,310. He was, however, assessed at an income of Rs. 67,011. THE income that has been assessed includes the share of profit in M/s. Madhabram Bora and others, Ulubari, Gauhati, which is a registered firm and the income of which has come up for consideration for the purpose of taxation in this assessment year for the first time. THE difference between the income returned and the income assessed being very large, the Income-tax Officer initiated penalty proceedings under Section 271(1)(c) read with Section 274(2) of the Act. In due course, the Inspecting Assistant Commissioner levied a penalty of Rs. 15,000 against the assessee.

(3.) ONE factor, however, swelled the income of the assessee in the relevant assessment year and that is the income of the assessee as partner in the partnership firm, M/s. Madhabram Bora and others. The Tribunal considered the submission of the assessee's counsel that this was the first year of the firm and it was not known whether the firm would be registered or not and that the return of the partnership firm showing the assessee as a partner also had been filed before the same Income-tax Officer and, therefore, according to the submission of the learned counsel for the assessee, there could be no intention on the part of the assessee to conceal the income derived from the partnership firm as such. The Tribunal gave due consideration to this aspect of the matter. Moreover, the Tribunal observed that in the order of penalty passed by the Inspecting Assistant Commissioner, there is no specific mention that the penalty has been imposed because of non-mention of the share income of the assessee in the return. According to the Tribunal it was not known whether the penalty was levied on the ground that the share income was not shown in the return concerned. The Tribunal also considered the fact that one of the reasons for the increase in the income of the assessee is due to the raising of the percentage. So, that also could not be a ground for intentional concealment as contemplated under Section 271(1)(c) of the Act. Having considered all these materials, the Tribunal observed that not showing the income from the firm was an inadvertent mistake and omission on the part of the assessee. In other words, according to the Tribunal, this case did not come within the proper ambit of Section 271(1)(c) of the Act and, therefore, the penalty was not justified. We do not find any sufficient ground to hold that the finding of the Tribunal in this respect is bad in law or otherwise perverse. The Tribunal had some materials before it which were considered and it came to a conclusion and this conclusion cannot be said to be illegal or perverse, in view of the facts and circumstances of the case as considered by the Tribunal and as noticed hereinabove.