COMMISSIONER OF INCOME TAX Vs. BINOD COMPANY

JUDGEMENT

(1.) AT the instance of the Commissioner of Income-tax, Bihar, Patna, the Patna Bench of the Income-tax Tribunal has referred the undermentioned question of law, for the opinion of this court, under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as " the Act ");

(2.) THE facts are simple. THE assessee is an unregistered firm and the matter relates to levy of penalty on the said firm under section 271(1)(c) of the Act. THE assessment year in question is 1968-69 to which the said Explanation to Section 271 (1)(c) of the Act would be clearly applicable. In terms of the said Explanation, where the total income returned by any person is less than eighty per cent, of the total income assessed, such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of Clause (c) of Section 271(1)(c) of the Act.

(3.) THE department, on the other hand, contended that since the assessee had itself admitted that the said cash credit of Rs. 5,400 be added to its total income for the purposes of taxation, it clearly suggested that the assessee had concealed this income and that, therefore, the penalty had been rightly imposed.