Skip to content


Rajpal Automobiles Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 9 of 1975
Judge
Reported in[1979]116ITR436(All)
ActsIncome Tax Act, 1961 - Sections 41(2) and 271(1)
AppellantRajpal Automobiles
RespondentCommissioner of Income-tax
Appellant AdvocateD.C. Chaturvedi, Adv.
Respondent AdvocateAshok Gupta, Adv.
Excerpt:
- - act, 1961. the tribunal being satisfied that the case involved a question of law referred the same to us for our opinion:.....liable to be assessed to tax. admittedly, the assessee did not mention this amount either in the returned income or in the column provided for the said purpose. the ito having found that the provisions of the explanation to section 271(1)(c) were applicable to the facts of the present case issued a notice to the assessee and thereafter referred the case under section 274(1) to the iac. the iac called upon the assessee to explain as to why was the penalty provided by section 271(1)(c) not imposable on the assessee. the assessee appeared before the iac but did not offer any explanation about the omission of not mentioning the amount in the return and in the column meant for the same. the iac found that the assessee was guilty of fraud and gross negligence as he did not disclose the.....
Judgment:

K.C. Agrawal, J.

1. Messrs. Rajpal Automobiles, Pratapgarh, is a registered firm. For the assessment year 1968-69, the firm submitted a return declaring a total income of Rs. 23,882. After making enquiries, the ITO completed the assessment by holding that the total income earned by the assessee in the year in question was Rs. 34,119. The difference between the returned and the assessed total income arose out of the two figures. One of them was Rs. 8,283 earned by the assessee as profit from the sale of a truck belonging to it. Under Section 41(2) of the I. T. Act, the income earned was to be shown in the return as the same was liable to be assessed to tax. Admittedly, the assessee did not mention this amount either in the returned income or in the column provided for the said purpose. The ITO having found that the provisions of the Explanation to Section 271(1)(c) were applicable to the facts of the present case issued a notice to the assessee and thereafter referred the case under Section 274(1) to the IAC. The IAC called upon the assessee to explain as to why was the penalty provided by Section 271(1)(c) not imposable on the assessee. The assessee appeared before the IAC but did not offer any explanation about the omission of not mentioning the amount in the return and in the column meant for the same. The IAC found that the assessee was guilty of fraud and gross negligence as he did not disclose the aforesaid amount. On the said findings, he imposed the minimum penalty of Rs. 8,228 on the assessee. The assessee preferred an appeal to the Tribunal. The matter came up for hearing before the Bench of two members of the Tribunal. They differed. Consequently, the case was referred to a third member. The third member held that the assessee was guilty of gross negligence. Accordingly, by majority, the appeal filed by the assessee was dismissed. Thereafter, the assessee filed an application under Sub-section (1) of Section 256 of the I. T. Act, 1961. The Tribunal being satisfied that the case involved a question of law referred the same to us for our opinion:

'Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the penalty of Rs. 8,228 imposed by the IAC for the assessment year 1968-69 under Section 271(1)(c) read with the Explanation thereto '

2. As observed above, the assessee did not offer any explanation for the omission to mention the amount in the return or in the column meant for the same. Learned counsel appearing for the assessee, however, stressed that, as the assessee was illiterate, it could be presumed on the facts and circumstances of the present case that the omission occurred due to his illiteracy. The statement made by the learned counsel does not impress us. It is not a question of presumption but of pleading and proof. The assessee did not file any affidavit or other evidence on record in support of his claim of the ground on which the amount was not mentioned. The assessee, therefore, having not done so, was rightly held to be guilty of gross negligence if not that of fraud.

3. In the result, we answer the question referred to us in the affirmative, in favour of the department and against the assessee. The revenue will be entitled to costs which are assessed at Rs. 200.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //