1. The question referred to this court under Section 66 (1), Income-tax Act, 1922, ran: "Whether on the facts and in the circumstances of the case, the penalty under Section 28(1)(c) of the Act could be levied on T. P. S. Hariram Sait in respect of the return filed for the assessment year 1943-44."
2. The facts relevant for the disposal of this question lie in a short compass. T. P. Sokkalal Ram Sait and his minor son Hariram Sait constituted a Hindu-undivided family. Sokkalal carried on a lucrative business in beedi manufacture. All along he was assessed to income-tax in the status of a Hindu undivided family, which consisted of himself and his minor son. Sokkalal Sait died on 22-6-1942. After his death, for the accounting period which ended with 16-8-1942 the guardians ot Hariram Sait, who was still a minor submitted the return to the Income-tax Officer. The Income-tax Officer found that there had been suppression of income. In addition to the income-tax levied on the basis of the income estimated by the Income-tax Officer he levied a penalty of Rs. 10,000 under Section 28 (1) (c) of the Act on Hariram Sait. The penalty was ultimately affirmed by the Appellate Tribunal, It is the validity of the levy of that penalty that is now in question.
3. Section 28 (1) (c), Income-tax Act runs:
"If the Income-tax Officer...... in the course of any proceedings under this Act, is satisfied that any person.
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(c) has concealed the particulars of his income ...... he (the Income-tax Officer) may direct that such person shall pay by way of penalty ........"
4. What has to be proved is that the person who has to be penalised has concealed particulars of his income. In this case the person charged with and found guilty of having effected the concealment of income was Hariram Sait. The concealment, to bring it within the scope of Section 28 (1) (c), must be a concealment of Hariram Sail's income, and it must also have been a concealment of which Hariram Sait was conscious. The finding of the Income-tax Officer, which was accepted by the Assistant Commissioner and eventually by the Tribunal, was that it was Hariram Sait's father Sokkalal who was mainly responsible for the suppression of the income. It should be remembered that Sokkalal died on 22-6-1942, and the accounting year came to a close on 16-8-1942. There was no finding either by the taxing authorities or by the appellate Tribunal that Hariram himself was in charge of his estate or that his guardians were in any way responsible for any concealment or suppression of income. The requirement of Section 28 (1) (c) being that Hariram to be penalised must have himself concealed his income, and that requirement not having been satisfied, we have to hold that there was no basis at all for the Tribunal to come to the conclusion, that Hariram should be penalised to the extent of Rs. 10,000.
5. In the view we have taken of the requirement of Section 28(1) (c), it is not necessary to discuss any of the other questions, no doubt interesting, raised by counsel on both sides.
6. We answer the question in the negative and in favour of the assessee. The assessee will be entitled to the costs of this reference. Counsel's fee Rs. 250.