1987 (1) TMI 43 - HC - Income Tax

Summary

Issues: Reopening of assessment u/s 147(a) for assessment year 1948-49 and validity of penalty u/s 271(1)(c).

Reopening of Assessment u/s 147(a): The case involved M/s. R. B. Shreeram Durgaprasad & Fatechand Narsinghdas (Export Firm) for the assessment year 1948-49, with common accounts with R. B. Shreeram Durgaprasad (Mining Firm). The Income-tax Officer reopened the assessment in March 1965 due to unaccounted transactions, including payments to the Maharajkumar of Vizianagaram. The reassessment resulted in an addition of Rs. 1,35,000 to the total income, leading to penalty proceedings u/s 271(1)(c).

Validity of Penalty u/s 271(1)(c): The Tribunal found that the assessee failed to provide a satisfactory explanation for unexplained cash credits and concealment of income. The Tribunal highlighted the "ingenious manipulations" and "mischief played" by the assessee, indicating deliberate concealment. The Supreme Court precedent in CIT v. Anwar Ali was distinguished, and the case was deemed to align with D. M. Manasvi v. CIT, where deliberate concealment was established.

Judgment: The court answered the first question affirmatively, supporting the Revenue, as the assessee could not raise the argument effectively. For the second question, the court also ruled in favor of the Revenue, emphasizing the deliberate concealment of income by the assessee. The assessee was directed to pay the costs of the reference to the Revenue.