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Issues involved:
1. Assessment of penalty under section 271(1)(c) of the Income-tax Act for concealment of income. 2. Determining if the partnership agreement entered into by a coparcener was on behalf of the Hindu undivided family or in his personal capacity. 3. Clarifying the legal position on the procedure followed in penalty proceedings under the Income-tax Act. 4. Deciding whether the income derived should be assessed in the hands of an individual or a Hindu undivided family. Analysis: The judgment pertains to an assessment of penalty under section 271(1)(c) of the Income-tax Act for alleged concealment of income by a Hindu undivided family concern. The case involved a coparcener, Darshan Kumar, entering into a partnership agreement for the sale of petroleum products. The assessing authority included the profits from the partnership in the income of the Hindu undivided family, leading to a penalty imposition of 100%. The primary issue was whether the profits should be considered the personal income of Darshan Kumar or that of the Hindu undivided family. The court considered the argument that Darshan Kumar believed the income to be personal despite funding from the family. The Revenue contended that since Darshan Kumar entered the partnership on behalf of the family, there was no concealment. The court disagreed, stating that the question of penalty was a mixed question of law and fact. Regarding the procedure in penalty proceedings, the court addressed whether the process followed was inquisitorial or accusatorial. The court emphasized the need for a fair procedure in quasi-criminal penalty proceedings. Additionally, the judgment highlighted the importance of determining whether income should be assessed in the hands of an individual or a Hindu undivided family. The court allowed the petition and directed the Tribunal to refer the question of penalty exigibility under section 271(1)(c) to the court. The judgment did not award costs, concluding the legal analysis of the case.
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