1990 (1) TMI 148 - AT - Income Tax

Summary

Issues:
1. Imposition of penalties under section 271(1)(c) of the Income-tax Act, 1961 on the assessee for concealing income from business and other sources.
2. Whether the assessee's reliance on unreliable books justifies the rejection of concealment of income.
3. Vicarious liability of the assessee for the misconduct of employees in filing inaccurate particulars of income.

Detailed Analysis:
1. The judgment deals with appeals against penalties imposed on the assessee under section 271(1)(c) of the Income-tax Act, 1961 for concealing income. The assessee, an individual engaged in bus and lorry business, filed returns for the assessment years 1976-77 and 1977-78 showing income based on books later found to be inaccurate. Following a search revealing discrepancies, the Income-tax Officer proposed additions to the income, leading to penalties under section 271(1)(c) for alleged concealment. The CIT (Appeals) partially upheld the penalties, considering the estimated income as indicative of concealment. The Tribunal affirmed the CIT (Appeals) decision, emphasizing the unassailability of the finding that the assessee concealed income from business and other sources.

2. The assessee contended that the unreliable nature of the books justified the assessment based on estimates and precluded a finding of concealment. However, the Tribunal rejected this argument, noting that the original return's income was based on falsified books, as admitted by the assessee's revised statement. The Tribunal found the assessee's reliance on incorrect books as an attempt to present a false picture of income, leading to the conclusion that concealment had occurred. Therefore, the Tribunal upheld the penalties imposed under section 271(1)(c) for concealing income.

3. Additionally, the assessee argued that being an elderly, uneducated, and sickly individual, she should not be held vicariously liable for the misconduct of employees in filing inaccurate income particulars. The Tribunal dismissed this argument, holding that the assessee could not evade responsibility for the inaccurate information presented in the returns. Even if the inaccuracies were due to the actions of employees, the assessee, as the taxpayer, bore the ultimate responsibility for ensuring the accuracy of the information provided. The Tribunal cited case law to support the principle that negligence or lack of awareness on the part of the assessee does not absolve them of liability for filing inaccurate particulars of income. Consequently, the Tribunal confirmed the penalties imposed under section 271(1)(c) on the assessee for concealing income, dismissing the appeals.