1991 (9) TMI 60 - HC - Income Tax

Summary

Issues:
1. Whether the Tribunal erred in holding that the assessee concealed the particulars of his income or furnished inaccurate particulars of such income?

Analysis:
The case involved the assessment year 1975-76 where the assessee, engaged in money-lending, faced scrutiny due to excess cash balance found during a raid. The Income-tax Officer held the explanation unsatisfactory, determining undisclosed income. The Appellate Assistant Commissioner accepted part of the explanation, which was upheld by the Tribunal. However, in penalty proceedings, the Tribunal found the explanation false, leading to a penalty of Rs. 37,000 under section 271(1)(c). The Tribunal's decision was based on the false explanation provided by the assessee regarding the source of funds, which amounted to fraud under the Explanation to section 271(1)(c) of the Income-tax Act, 1961.

The Tribunal's decision was challenged, arguing that the non-declaration of income was not concealment as it aligned with the earlier explanation. However, the Tribunal found the explanation false after analyzing various statements and facts. The court emphasized that the finding of a false explanation was a factual determination that was not challenged. As the explanation was deemed false and fraudulent, the Tribunal's decision to impose the penalty was upheld. The court clarified that the penalty was not solely based on the order under section 132(5) but on independent material showing the false explanation, justifying the penalty of Rs. 37,000.

In conclusion, the court affirmed the Tribunal's decision, stating that the assessee concealed income by providing false explanations. The penalty was justified based on the fraudulent explanation, independent of the order under section 132(5). The court answered the question in the affirmative, supporting the Revenue's position and upholding the penalty imposed on the assessee.