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T.P. Hariram Sait by Guardians Parvathi Ammal and Peevammal Vs. the Commr. of Income-tax, Madras - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberCase Referred No. 26 of 1952
Judge
Reported inAIR1955Mad653; [1955]28ITR231(Mad); (1955)2MLJ440
ActsIncome-tax Act, 1922 - Sections 28(1)
AppellantT.P. Hariram Sait by Guardians Parvathi Ammal and Peevammal
RespondentThe Commr. of Income-tax, Madras
Appellant AdvocateS. Swaminathan, Adv.
Respondent AdvocateC.S. Rama Rao Sahib, Adv.
Excerpt:
.....period which ended with 11th august 1942, the minor's guardians submitted a return to the income-tax officer. the income-tax officer, in addition to the income-tax levied on the basis of income estimated by him, levied a penalty on the assessee under section 28 (1) (c) of the indian income-tax act (xi of 1922), finding that the father was responsible for the concealment of the income,; held, in the absence of any finding by the taxing authorities or by the appellate tribunal that the minor himself was in charge of the estate or that his guardian were in any way responsible for the suppression or concealment of the income, there was no basis at all for the levy of penalty under section 28 (1) (c) of the act.; to levy a penalty under section 28 (1) (c) of the act (xi of 1922) what..........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.....
Judgment:
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.

* * * * *

(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.


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