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Issues involved: Assessment of penalty under s. 271(1)(c) for the assessment years 1960-61 to 1964-65 based on additions made by the ITO, cancellation of penalty for certain years by the Commissioner and Tribunal, challenge to penalty for the year 1963-64, and the contention regarding deliberate concealment of income by the assessee.
Assessment Years 1960-61 to 1962-63: The Commissioner cancelled the penalty for these years, but sustained it for 1963-64 due to additions made by the ITO. The petitioner contended that agreeing to additions for assessment purposes does not imply deliberate concealment for penalty under s. 271(1)(c). The court noted that once deliberate concealment is found, the section applies regardless of the assessee's consent. Assessment Year 1963-64: The IAC imposed a penalty based on the assessee's request for a consolidated addition covering bogus loans and low gross profit. The Commissioner upheld the penalty for this year, stating that the acceptance of the estimate made by the ITO implies deliberate concealment. The court held that the assessee's agreement to additions based on low gross profit indicated deliberate concealment, justifying the penalty. Legal Precedents: In previous cases, courts held that agreeing to higher income estimates by tax authorities can imply deliberate concealment, leading to penalty under s. 271(1)(c). The court distinguished cases where the assessee maintained accounts but deliberately understated income, leading to a finding of concealment. The court emphasized that deliberate concealment can be inferred from the actions of the assessee, even without explicit estimates in the return. Conclusion: The court dismissed the writ petition, finding that the inference of deliberate concealment based on the assessee's conduct in agreeing to additions was justified. The court upheld the penalty for the assessment year 1963-64, emphasizing that the acceptance of additions before assessment completion indicated deliberate concealment.
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