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Issues Involved:
1. Commencement of penalty proceedings under section 271 of the Income-tax Act, 1961. 2. Evidence of deliberate concealment of income or furnishing inaccurate particulars under section 271(1)(c) of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Commencement of Penalty Proceedings: The first issue concerns whether the penalty proceedings were properly commenced in the course of any proceeding under the Act for the assessment years 1959-60 to 1962-63. The court examined the provisions of both the Income-tax Act, 1922, and the Income-tax Act, 1961. Under section 28 of the 1922 Act, penalty for concealment of income could be initiated during any proceedings under the Act, with no period of limitation specified. Section 271 of the 1961 Act similarly allows for penalty proceedings to be initiated during any proceedings under the Act, but section 275 imposes a two-year limitation from the date of completion of the main proceedings. The court cited several precedents to elucidate the interpretation of "in the course of any proceedings under the Act," emphasizing that the initiation of penalty proceedings must occur while the authority is still in seisin of the main proceedings. The court concluded that the Income-tax Officer had indeed initiated penalty proceedings during the pendency of the main assessment or reassessment proceedings for the years in question, as evidenced by the directions to issue notices for penal action under section 271(1)(c) recorded in each assessment order. Thus, the requirements of section 271 read with section 275 of the Act of 1961 were satisfied. However, for the assessment year 1961-62, the return was filed before April 1, 1962, and the assessment was under the 1922 Act. The court referred to its earlier decision in Commissioner of Income-tax v. Hiralal Mohanlal Shah, which held that penalty proceedings could not be initiated under the 1961 Act for assessments completed under the 1922 Act. Consequently, the penalty proceedings for the assessment year 1961-62 were deemed invalid. 2. Evidence of Deliberate Concealment: The second issue was whether there was any material or evidence before the Tribunal to hold that the assessee had deliberately concealed particulars of his income or furnished inaccurate particulars as required by section 271(1)(c) of the Act for the assessment years 1959-60 to 1962-63. The Tribunal had upheld the penalties based on its earlier decision in the registration proceedings, which concluded that the alleged firm, M/s. Kohinoor Grain Mills Sales Depot, was not a genuine partnership but a sole proprietary concern of the assessee. The Tribunal found that the assessee had created a deliberate disguise to conceal income. The court distinguished this case from Commissioner of Income-tax v. L. H. Vora, where it was held that mere falsity of the explanation was insufficient to conclude concealment. Here, the Tribunal had relied on substantive evidence from the registration proceedings, which demonstrated a deliberate attempt by the assessee to conceal income through a fictitious partnership. Therefore, the court found that there was sufficient material to justify the levy of penalties for deliberate concealment or furnishing of inaccurate particulars. Conclusion: 1. The penalty proceedings for the assessment years 1959-60, 1960-61, and 1962-63 were properly commenced during the main assessment proceedings, but the penalty proceedings for the assessment year 1961-62 were invalid. 2. There was sufficient material to hold that the assessee had deliberately concealed income or furnished inaccurate particulars for the assessment years 1959-60, 1960-61, and 1962-63. The assessee was ordered to pay the costs of the reference to the Commissioner.
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