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TMI Blog2000 (6) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... eclared by the assessee includes share income of Rs. 44,684 in the profits of M/s. Vijay Agencies, Jaipur. This was accepted and assessed and assessment was completed under section 143(1). Subsequently seizure operation was carried on premises of M/s. Vijay Agencies and its partners on 15-6-1989. On the basis of incriminating documents found during the course of search, it was revealed that the firm has made sales out of the books. In view of these incriminating documents, Shri B.K Jain, Partner, surrendered under section 132(4) Rs. 3,00,447. The appellant's share of unaccounted income worked out to Rs. 60, 089. Consequently, the assessment proceedings were reopened by issue of notice under section 148 and re-assessment was completed. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the fact while deleting the penalties imposed under section 27 1 (1)(c), in the above mentioned appeals, that the Authorised Officer had given assurance to Shri B.K. Jain, partner, while recording his statement under section 132(4) that no penalty would be imposed or prosecution initiated. 3.4 The penalty proceedings initiated in-the case of the firm are still pending. The penalty in the hands of partner/s can be imposed if it is established that the said partner or partners are guilty of contumacious conduct, their knowledge and/or the intention of managing the affairs of the firm in such manner so as to suppress the income cannot be imputed to other partner(s). In such a case, the penalty would be liable to be imposed on the guilty pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Laxmi Narain v. CIT, 103 ITR 106, I am of the opinion that no case has been made out by the ACIT on the basis of material and facts, which warrants imposition of penalty on the appellant. Accordingly, penalty imposed Rs. 24,297 under section 27 1 (1)(c) is cancelled and deleted.' Against this order, revenue has come in appeal before us. 4. The learned D.R. argued that penalty can be imposed both on the firm and its partners. In support of this, the learned D.R. relied upon the decisions of the Madhya Pradesh High Court Ramlal Agarwal's case Delhi High Court in Madan Lamba v. CIT [1983] 139 ITR 849 Madras High Court in Shiv Chand Dalmia v. CIT[1999] 237 ITR 809 and Gujarat High Court in Ganpatlal N. Dalwadi v. CIT [1993] 200 ITR 5032. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame offence. 6. We have heard the rival parties and have perused the material available on record. The undisputed facts of this case are that when incriminating documents were found and seized, Shri B.K Jain, Partner of the assessee firm, was enquired as to whether he would like to make surrender and availing of the immunity available under Explanation 5 under section 27 1 (1)(c) of the Income-tax Act. A specific question was put to Shri B.K Jain while recording statement under section 132(4). He opted in favour of surrender and, accordingly, surrender of the stated amount was made in the case of the firm. In para 3.4 of his order, the CIT (Appeals) has categorically stated that partners can be penalised only when they are found guilty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has reasonable cause for not filing his returns of income within the time because there was delay in the firm's case wherein they have considered: Impossibility of penalty on a partner should depend upon a consideration of the following circumstances: (a) whether he is a partner of a registered firm or unregistered firm; (b) whether he has income other than the share income or not and, if so, the nature and extent of such income; (c) whether he is one of several partners to whom any contumacious conduct on the part of the firm could not be attributed or whether he is for all practical purposes the brain behind the firm or able to control its affairs and so responsible for its delays and defaults; (d) whether any penalty has been or can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee claiming that his main source of income was from firm and the firm filed its return of income on January 21, 1984, whereas the assessee filed return of his income on 30-7-1985. it was held that assessee has no proper explanation for not filing the return in time and imposition of penalty was held as justified. 8. The analysis of all these above cases relied upon by the learned D.R. is that these cases are with reference Lo penalty imposable under section 271(1)(a) where the consideration is all together different as compared to penalty imposable under section 271(1)(c). 9. Besides the decision of Punjab Haryana High Court in the case of CIT v. Pratap Chand Maheshwari [1980] 124 ITR 653 , which has been relied upon by this Be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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