COMMISSIONER OF INCOME TAX Vs. GULATI S S

JUDGEMENT

(1.) THE matter here relates to the three assessment years 1973-74, 1974-75 and 1975-76.

(2.) THE assessee Shri S.S. Gulati, and his wife, Smt. Krishna Gulati, had 1/3rd share each in the firm, Belmont Rubber Industries, Faridabad, Both the assessee and his wife filed separate returns of income mentioning therein the amounts received by them from the said firm and they were assessed accordingly. Later, in the course of income-tax proceedings in the case of the firm for the year 1977-78, it came to the notice of the Income-tax Officer that the assessee had not included his wife's income from the firm in his income-tax return. He, consequently, initiated action under Section 147 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), and issued notice to the assessee under Section 143 thereof. Fresh assessments for the three assessment years in question were thereafter completed and orders passed accordingly. During the course of these proceedings, the Income-tax Officer also initiated action under Section 271(1)(c) of the Act for imposing penalty on the ground that while filing his original returns, the assessee had not disclosed the income of his wife from Belmont Rubber Industries. THE Income-tax Officer eventually held that the assessee had concealed his wife's income and he consequently levied penalties upon the assessee for the three assessment years in question in terms of Section 271(1)(c) of the Act. This order was later upheld in appeal by the Appellate Assistant Commissioner. THE Tribunal, however, took a contrary view and held that as the assessee and his wife did not have any income other than their share income from the said firm, Belmont Rubber Industries, there was no concealment of income by the assessee by not including the income of his wife from the firm in his return. THE penalty imposed upon the assessee was consequently cancelled.