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Kr. Sripal Singh Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 170 of 1971
Judge
Reported in[1975]98ITR366(All)
ActsIndian Income Tax Act, 1922 - Sections 28(1)
AppellantKr. Sripal Singh
RespondentCommissioner of Income-tax
Appellant AdvocateS.B.L. Srivastava, Adv.
Respondent AdvocateDeokinandan, Adv.
Excerpt:
- - 3. now, the principles laid down by this court in the case of lalchandgopal das are no longer good law in view of the decision of the hon'blesupreme court in the case of commissioner of income-tax v......april 15, 1963, in i.t.a. no. 5955 of 1962-63 which was passed in the quantum appeal filed by the assessee held that the assessee was guilty of concealment but reduced the penalty to rs. 2,000. the tribunal while allowing the appeal relied solely on the findings given by it in the quantum appeal that the assessee's explanation regarding the deposits was found to be false and that he had no bank account prior to 1947. it also relied upon the finding given in the quantum appeal that misleading information was given, namely, that the assessee did not want to mix up the zamindari income with the amount received from his relations while he had in fact done so. following the decision of this court in the case of lalchand gopal das v. commissioner of income-tax, [1963] 49 itr 324 , it held.....
Judgment:

C.S.P. Singh, J.

1. This is a reference under Section 66(2) of the Indian Income-tax Act, 1922, made by the Income-tax Appellate Tribunal, Allahabad, and the following question has been referred for our opinion;

'Whether, upon the facts and in the circumstances of the case, the Tribunal was right in law in holding that a penalty under Section 28(1)(c) of the Indian Income-tax Act, 1922, was attracted to this case ?'

2. The dispute relates to the assessment for the year 1947-48. The assessee is the karta of a Hindu undivided family and the original assessment for this year was made on a total income of Rs. 2,188. Subsequently, the Income-tax Officer received information that the assessee had made a fixed deposit of Rs. 40,000 on January 7, 1947, and inasmuch as the date fell within the financial year ending on. March 31, 1947 (which is the relevant accounting year), a notice under Section 34 was issued in respect of the year in question. The explanation of the assessee in respect of an amount of Rs. 10,000 was accepted, and in respect of Rs. 30,000 was rejected, and the amount was included as income from an undisclosed source. On an appeal being filed, the Appellate Assistant Commissioner gave two notices for enhancement, and ultimately the amount of assessable income was enhanced. On appeal to the Tribunal, the enhancement made by the Appellate Assistant Commissioner was deleted, but the order of the Income-tax Officer was upheld. The Income-tax Officer, thereafter, initiated proceedings under Section 28(1)(c) of the Act. The assessee gave a written explanation to the notice on February 10, 1959, but the Income-tax Officer did not agree with the explanation and imposed a penalty of Rs. 6,620. On an appeal being taken to the Appellate Assistant Commissioner by the assessee, it was held that the department had not conclusively established that there had been concealment on the part of the assessee and he accordingly set aside the penalty. The Income-tax Officer thereafter appealed to the Tribunal. The Tribunal relying upon the order dated April 15, 1963, in I.T.A. No. 5955 of 1962-63 which was passed in the quantum appeal filed by the assessee held that the assessee was guilty of concealment but reduced the penalty to Rs. 2,000. The Tribunal while allowing the appeal relied solely on the findings given by it in the quantum appeal that the assessee's explanation regarding the deposits was found to be false and that he had no bank account prior to 1947. It also relied upon the finding given in the quantum appeal that misleading information was given, namely, that the assessee did not want to mix up the zamindari income with the amount received from his relations while he had in fact done so. Following the decision of this court in the case of Lalchand Gopal Das v. Commissioner of Income-tax, [1963] 49 ITR 324 , it held that a penalty was leviable in respect of the concealment.

3. Now, the principles laid down by this court in the case of LalchandGopal Das are no longer good law in view of the decision of the hon'bleSupreme Court in the case of Commissioner of Income-tax v. Anwar Ali : [1970]76ITR696(SC) ,wherein, it has been held that the onus of proving that the assessee hadconcealed his income is upon the department and that if there is no evidence on the record except that the explanation given by the assessee isfalse, it does not follow that the receipts were the taxable income of theassessee. It was also held that the findings given in the assessment proceedings for determining or computing tax are not conclusive in penaltyproceedings, although they may constitute evidence of concealment. The decision of the Tribunal is based entirely on the findings given in the quantum appeal and on the fact that the explanation given by the assessee was false. The approach of the Tribunal was justified so long as the case of Lalchand Gopal Das held the field, but cannot be sustained in view of the decision of the Supreme Court in Anwar Ali's case.

4. We, accordingly, answer the question referred in the negative and against the department, and in favour of the assessee. The assessee is entitled to his costs which we assess at Rs. 200. Counsel's fee is assessed at the same figure.


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