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Assessment proceedings for the year 1944-45, validity of penalty under section 28(1)(c) of the Income-tax Act, concealment of income, deliberate furnishing of inaccurate particulars, continuity of Hindu undivided family, conscious concealment, assessment of guilt in case of deceased karta. Analysis: The case involved assessment proceedings for the year 1944-45 concerning a Hindu undivided family after the death of the karta, Subbarayulu Chettiar. The family, represented by Radharukmani Ammal, faced a penalty under section 28(1)(c) of the Income-tax Act, which was confirmed by the Appellate Assistant Commissioner and the Tribunal. The main question referred to the Court was whether the penalty was validly imposed on the assessee. The Tribunal upheld the penalty, stating that the Hindu undivided family is a continuing unit, and the successor of the karta can be penalized for concealment. The Tribunal found that there were fictitious entries and unexplained sums of money in the accounts, justifying the penalty under section 28(1)(c). The Appellate Assistant Commissioner, however, found that Radharukmani Ammal, as the guardian, was not guilty of concealment as she relied on the accounts maintained by her deceased husband. He emphasized that the family, not the individual, is liable for any concealment of income. The Court analyzed the requirements of section 28(1)(c), emphasizing that concealment must be conscious and from the assessing authority. It was argued that Subbarayulu Chettiar's acts did not amount to conscious concealment under the Act, as there was no evidence of deliberate furnishing of inaccurate particulars by Radharukmani Ammal. The Court concluded that since Radharukmani Ammal had no guilty knowledge of concealment, the Hindu undivided family could not be held liable for concealment under section 28(1)(c). The Court rejected the penalty, ruling in favor of the assessee and awarding costs of the reference. In essence, the judgment focused on the distinction between individual and family liability for concealment of income, emphasizing the need for conscious concealment and deliberate furnishing of inaccurate particulars to impose penalties under the Income-tax Act.
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