PANDEY J. - As directed under section 66(2) of the Indian Income-tax Act, 1922, the Income-tax Appellate Tribunal, Bombay, has referred to this court for its opinion the following question of law :
'Whether for the concealment of income for the assessment year 1958-59 a penalty under section 271(1)(c) of the Income-tax Act, 1961, could be validly imposed on the assessee ?'
The material facts giving rise to this reference are these. The relevant assessment year is 1958-59, the corresponding account year being the one ending on March 31, 1958. The assessee is a practicing advocate who takes up income-tax and sales tax cases. For the relevant account year he showed by estimate his income to be Rs. 5,000. He claimed that he had not maintained any account. The Income-tax Officer, who completed the assessment on March 29, 1963, found upon a consideration of the evidence that the assessee had concealed the particulars of his income. Since the minimum penalty leviable in this case exceeded Rs. 1,000, he referred the matter to the Inspecting Assistant Commissioner under section 274(2) of the Income-tax Act, 1961. In so doing, the Income-tax Officer relied upon the provisions of section 297(2)(g) of the Income-tax Act, 1961, because the assessment was completed after that Act came into force on April 1, 1962. The Inspecting Assistant Commissioner served upon the assessee the necessary show cause notice, heard him at length and came to the conclusion that the provisions of section 271(1)(c) were attracted and levied on March 12, 1965, a penalty of Rs. 3,000. On appeal, the Appellate Tribunal confirmed the levy of the penalty and declined to make a reference. It was then that this reference was made as directed by this court.
Having heard the counsel, we have come to the conclusion that the question referred to us must be answered in the affirmative. Although the assessment year is 1958-59, the assessment in this case was made on March 29, 1963. That being so, if the penalty was leviable, the penalty had to be levied under section 271(1)(c) of the Income-tax Act, 1961, as provided by section 297(2)(g) of that Act which reads :
'(2) Notwithstanding the repeal of the Indian Income-tax Act, 1922 (XI of 1922) (hereinafter referred to as the repealed Act), -
(g) any proceedings for the imposition of a penalty in respect of any assessment for the year ending on the 31st day of March, 1962, or any earlier year, which is completed on or after the 1st day of April, 1962, may be initiated and any such penalty may be imposed under this Act'.
We may mention here that the validity of this provision was Challenged, and affirmed by the Supreme Court in Jain Brothers v. Union of India.
The learned counsel for the assessee argued that this was not a fit case imposition of a penalty because there was really no concealment of income. The assessee sought to raise this question in the reference, but this court declined to allow him to do so on the ground that it was a question of fact and observed :
'The question which the assessee really desires to be referred to this court is whether, on the facts and circumstances of the case, there was concealment of income. This question is purely a question of fact. The question whether there has been a deliberate concealment of income is clearly a question fact.'
In the result, we answer the question referred to us in the affirmative and direct that the assessee shall pay all costs of this reference. Hearing fee Rs. 100.
Question answered in the affirmative.