1975 (12) TMI 39 - HC - Income Tax

Summary

Issues Involved:
1. Whether the assessee concealed income for the assessment years 1957-58 and 1958-59.
2. Whether the levy of penalty of Rs. 10,000 for each year is justified.

Summary:

Issue 1: Concealment of Income
The assessee, a bus operator, returned a loss of Rs. 24,536 for the assessment year 1957-58, estimating income from 15 buses at Rs. 8,000 per bus based on the previous year's determination by the Income-tax Appellate Tribunal. Upon being asked to produce accounts u/s 22(4) of the Act, the assessee denied maintaining any accounts and did not produce trip sheets, invoices, or correspondence with regional transport authorities. The Income-tax Officer (ITO) estimated the total income based on an increase in wealth, determining it at Rs. 2,88,683 at Rs. 19,245 per bus. For the assessment year 1958-59, the assessee filed a return showing a business loss of Rs. 37,779, again denying the maintenance of accounts. The ITO estimated the income at Rs. 22,000 per bus, confirmed by the Appellate Assistant Commissioner. The Tribunal fixed the income at Rs. 15,000 per bus for 1957-58 and Rs. 17,500 for 1958-59. The ITO initiated penalty proceedings u/s 28(1)(c) for alleged concealment of income. The Tribunal held that the charge of concealment was amply proved by the facts and circumstances, confirming the penalty of Rs. 10,000 for each year.

Issue 2: Justification of Penalty
The assessee contended that his income estimates were based on previous determinations and increases in wealth, arguing that differences in estimates do not imply deliberate concealment. The Tribunal disagreed, stating that the assessee's method did not reflect real income and that the assessee must have been aware of his real income but deliberately estimated it lower. The Tribunal found that the assessee's actions amounted to concealment of income rather than merely furnishing inaccurate particulars. The High Court upheld the Tribunal's view, stating that the assessee's deliberate under-estimation of income justified the penalty. The reference was answered in the affirmative, against the assessee, with costs.