1973 (2) TMI 28 - HC - Income Tax

Sales tax department enhanced turnover for sales tax assessment. The enhanced sales were not included in income-tax returns - whether there is deliberate concealment by the assessee attracting levy of penalty - whether, on the facts and in the circumstances of the case, penalty under section 28(1)(c) of the Indian Income-tax Act, 1922, has been Tightly levied - If the above question is answered against the assessee whether the quantum of penalty levied is justifiable

Summary

Issues:
1. Whether the penalty under section 28(1)(c) of the Indian Income-tax Act, 1922, has been rightly levied?
2. Whether the quantum of penalty levied is justifiable?

Analysis:

Issue 1:
The case involved an assessee, a grocery firm, which was assessed for the assessment year 1959-60. The Income-tax Officer found discrepancies in the turnover disclosed by the assessee, based on information from a pocket note book seized by sales tax authorities. The sales tax authorities had added a turnover of Rs. 92,000 to the assessee's taxable turnover, which was upheld in appeal. Subsequently, the Income-tax Officer included this amount in the turnover disclosed by the assessee and levied a penalty under section 28(1)(c) for the suppression of turnover. The Appellate Assistant Commissioner and the Tribunal also upheld the penalty, considering the deliberate suppression of turnover by the assessee. The Tribunal concluded that the suppression was intentional and without mitigating circumstances, justifying the penalty.

Issue 2:
Regarding the quantum of penalty, the Tribunal's decision was supported by the Supreme Court's ruling in Mansukhlal and Brothers v. Commissioner of Income-tax. The Court held that the deliberate suppression of turnover, as evidenced by the circumstances and the assessee's actions, warranted the penalty imposed under section 28(1)(c). The Court affirmed the Tribunal's findings and upheld the penalty levied against the assessee.

In conclusion, the Court affirmed the levy of the penalty under section 28(1)(c) and deemed the quantum of penalty justifiable based on the deliberate suppression of turnover by the assessee. The decision was in line with relevant legal precedents and upheld the actions taken by the Income-tax authorities in this case.