1987 (3) TMI 24 - HC - Income Tax

Summary

Issues:
1. Refusal to produce judgment of Additional Sessions Judge for penalty proceedings.
2. Justification of penalty under section 271(1)(c) of the Income-tax Act.

Detailed Analysis:
Issue 1:
The case involved a firm engaged in the manufacture and sale of Khandasari sugar. The Income-tax Officer imposed a penalty under section 271(1)(c) of the Income-tax Act for concealment of income based on certain additions made to the income. During the appeal process, the partners of the firm were acquitted by the Metropolitan Additional Sessions judge in a criminal court for the same offense. The Tribunal, however, confirmed the penalty without considering the judgment of the criminal court. The assessee filed a review petition requesting a rehearing based on the acquittal judgment, which was dismissed by the Tribunal. The High Court held that the Tribunal was not obligated to adjourn the matter or consider the criminal court's judgment as it did not rely on it in its decision. Therefore, the first issue was answered in favor of the Revenue.

Issue 2:
Since the first issue was answered in the affirmative, the High Court did not address the second question regarding the justification of the penalty under section 271(1)(c) of the Income-tax Act. The Court declined to consider this issue in view of its response to the first question. The reference was ordered accordingly, and no costs were awarded. Additionally, the request for leave to appeal to the Supreme Court under section 261 of the Income-tax Act was rejected by the High Court.

In conclusion, the High Court upheld the Tribunal's decision to confirm the penalty imposed under section 271(1)(c) of the Income-tax Act, despite the acquittal of the partners by the criminal court. The Court emphasized that the Tribunal's decision was based on the facts and circumstances before it, unrelated to the judgment of the criminal court.