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Commissioner of Income-tax Vs. M. Mukundan (Decd.) (by Legal Representatives) - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberI.T.R. No. 71 of 1968
Judge
Reported in[1974]95ITR604(Ker)
ActsIncome Tax Act, 1961 - Sections 260(1) and 271(1); Finance Act, 1964
AppellantCommissioner of Income-tax
RespondentM. Mukundan (Decd.) (by Legal Representatives)
Cases ReferredHajee K. Assainar v. Commissioner of Income
Excerpt:
- .....of penalty arising from the assessment that has been made for the year 1958-59 on the deceased assessee, mukundan, in relation to which assessment we answered two questions just now in the income-tax referred case no. 66 of 1968. we held therein that the income-tax authorities were justified in treating the sum of rs. 21,000 as concealed income from other sources of mukundan and that amount can be taxed. the further question arising in this case is whether any penalty can be imposed on the assessee under section 271(1)(c) of the income-tax act, 1961. the tribunal has held that it cannot be done and in the short paragraph dealing with this question it observed that though they were justified in treating the sum of rs. 21,000 as in all probability the income of the deceased, mukundan,.....
Judgment:

1. This relates to the question of imposition of penalty arising from the assessment that has been made for the year 1958-59 on the deceased assessee, Mukundan, in relation to which assessment we answered two questions just now in the Income-tax Referred Case No. 66 of 1968. We held therein that the income-tax authorities were justified in treating the sum of Rs. 21,000 as concealed income from other sources of Mukundan and that amount can be taxed. The further question arising in this case is whether any penalty can be imposed on the assessee under Section 271(1)(c) of the Income-tax Act, 1961. The Tribunal has held that it cannot be done and in the short paragraph dealing with this question it observed that though they were justified in treating the sum of Rs. 21,000 as in all probability the income of the deceased, Mukundan, that degree of proof, necessary to say positively that the amount represented concealed income of the assessee, was not forthcoming and, therefore, no penalty can be imposed. Counsel for the revenue invited our attention to the Explanation introduced by an amendment effected by the Finance Act of 1964 to Section 271(1) which came into force in 1964 and he urged that the notice for the imposition of penalty having been issued after this amendment, the provision in the Explanation must apply and under that provision penalty can be imposed. We do not think that that Explanation can have any relevance for deciding the question of imposition of penalty on the deceased, Mukundan, in relation to the assessment year 1958-59. In a recent decision of this court in I.T.R. No. 8 of 1968 Hajee K. Assainar v. Commissioner of Income-tax [1971] 81 I.T.R. 423 (Ker,).we held that the amendment has no retrospective effect and can apply only to income concealed after it came into force. It makes no difference whether the notice was issued after the amendment or before the amendment. The concealment in this case took place long before the amendment was effected. The provision then in existence must govern the matter. The Tribunal was right in cancelling the imposition of penalty. The question referred to us is, therefore, answered in the affirmative that is in favour of the assessee and against the department. We make no order as to costs.

2. A copy of the judgment under the seal of the High Court and the signature of the Registrar will be sent to the Appellate Tribunal as required by Sub-section (1) of Section 260 of the Income-tax Act, 1961.


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