SHANTI ROY Vs. CHIEF COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE appellant in the two appeals is a doctor and gynaecologist and obstetrician and an assessee under the provisions of the Income -tax Act, 1961 (hereinafter to be referred to as 'the Act'. The appeals are with respect to the assessment year 1994 -95. Miscellaneous Appeal No. 59 of 2002 is with respect to the order of assessment whereby the figures returned by the assessee have been disbelieved, leading to enhancement of gross income. Miscellaneous Appeal No. 420 of 2004 is consequential in nature, whereby penalty have been imposed on the assessee and the dues, have been directed to be recovered with interest.

(2.) THE basic facts necessary for the disposal of the appeal shall be drawn from Miscellaneous Appeal No. 59 of 2002, except by specific reference to Miscellaneous Appeal No. 420 of 2004. The assessee at the relevant point of time was in the service of the Bihar Government as a doctor, and was also a private practitioner. She filed returns showing gross income of Rs. 2,85,140 for the period in question. Search and seizure of her residence -cum -clinic took place on August 10, 1994. Cash amount of Rs. 26,05,915 was recovered from her premises, apart from documents and cash found in lockers, etc. This was followed by notice dated November 26, 1996, that the returns shall be subjected to scrutiny in terms of Section 143(1)(a) and 142(1)(b) of the Act. On a consideration of the materials on record, by his order dated March 19, 1997 (annexure I), the learned Assessing Officer rejected the returned figures, and added a sum of Rs. 2,00,000 spent towards the marriage reception of her daughter. A further sum of Rs. 1,00,000 was added towards referral income which is the amount of commission received from clinic and laboratories of doctors for having referred patients to them for consultation and/or investigation. Aggrieved by the order, the assessee preferred appeal which was allowed in full by the learned appellate authority by his order dated June 12, 2000 (annexure 4), and that of the learned Assessing Officer was modified. Aggrieved by the appellate order, the Department preferred a second appeal before the Income -tax Appellate Tribunal, Patna Bench, Patna, which has been allowed by the impugned order dated October 10, 2001, whereby the order of the learned appellate authority has been set aside, and that of the learned Assessing Officer has substantially been restored with some relief of the assessee with respect to referral income. The Tribunal has held that the addition of Rs. 2,00,000 towards marriage expenses were fully justified, and the amount of referral income received by the assessee has been reduced to Rs. 50,000.

(3.) WHILE assailing the validity of the impugned order, learned Counsel for the assessee submits that there was no material before the learned Assessing Officer to enhance the figures of income. The same is without any factual basis and is arbitrary. He relies on the judgment of the Privy Council in the case of CIT v. Laxminarain Badridas [1937] 5 ITR 170. While pressing the analogous Miscellaneous Appeal No. 420 of 2004, whereby the penalty and interest have been imposed on the assessee, learned Counsel for the assessee submits that penalty can be imposed only if dishonest intention is attributable to the assessee. Mere difference of opinion on the returned figures cannot justify imposition of penalty. He relies on the following reported judgments: (i) CIT v. Sardar Bhagat Singh : [1983] 142 ITR 836 (Patna); and (ii) CIT v. Nipani Tobacco Stores : [1984] 145 ITR 128 (Patna).