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1976 (6) TMI 2 - HC - Income Tax

Issues involved:
Petition filed u/s 256(2) of the Income-tax Act, 1961 seeking direction to the Income-tax Appellate Tribunal to draw up a statement of the case and refer questions regarding penalty imposition and relevant material u/s 271(1)(c) of the Act.

Summary:

The petitioner, a registered firm engaged in sea food business, filed a return showing a loss for the year 1968-69. Following an investigation into investments made by the partners in other firms, an agreement was reached where a sum of Rs. 7 lakhs was treated as undisclosed business profits for the years 1964-65 to 1968-69. The Income-tax Officer added Rs. 2,84,727 as income derived from undisclosed sources and initiated penalty proceedings u/s 271(1)(c). The penalty imposed by the Inspecting Assistant Commissioner was equivalent to the concealed income amount. The petitioner contended in appeal that there was no clear evidence of income concealment, but the Tribunal upheld the penalty imposition based on the admission made in the settlement agreement. However, the Tribunal allowed the appeal on the grounds of total income computation. The petitioner sought reference to the High Court challenging the Tribunal's finding on concealment.

The High Court dismissed the petition, stating that a penalty u/s 271(1)(c) can be levied if the assessee is proven to have concealed income. The Tribunal's reliance on the admission in the settlement agreement was deemed valid evidence of concealment. The Court found no legal question requiring its decision, as the Tribunal's finding was based on facts and not arbitrary. The petition was dismissed without costs.

 

 

 

 

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