1984 (9) TMI 23 - HC - Income Tax

Summary

Issues:
Application under section 256(2) of the Income-tax Act, 1961 for reference of questions of law arising out of Tribunal's order for opinion of the High Court. Assessment of professional income, initiation of penalty proceedings under section 271(1)(c) of the Act, imposition of penalty, appeal to Tribunal challenging penalty, rejection of application under section 256(1) of the Act by Tribunal.

Analysis:
The case involves an application under section 256(2) of the Income-tax Act, 1961, where the Department sought reference of questions of law arising from the Tribunal's order to the High Court. The assessee, a doctor with income from salary and private practice, had not maintained proper accounts for his professional income, which was returned on estimate. Subsequently, the Income-tax Officer initiated proceedings under section 147(a) based on information regarding additional income received by the assessee. The total income was reassessed, and penalty proceedings under section 271(1)(c) were initiated, resulting in the imposition of a penalty which was later confirmed by the Appellate Assistant Commissioner.

In the appeal to the Tribunal, it was contended that there was no evidence to suggest that the assessee had concealed income or committed fraud in returning the correct income. The Tribunal, after considering the evidence and circumstances, found that the assessee had discharged the onus of proving that he had not received the entire amount, particularly injection fees, as claimed by the Department. The Tribunal set aside the penalty, stating that there was no material to support the allegation of concealment or fraud by the assessee. The Department failed to rebut the evidence presented by the assessee, relying solely on receipts as proof of income discrepancy.

The High Court, after hearing arguments from both sides, concluded that no question of law arose from the Tribunal's order for consideration. The court held that the issue at hand was a question of fact, as the Tribunal had already determined that the assessee had not concealed income or furnished false particulars. As such, the application under section 256(2) was dismissed, with no costs awarded.