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TMI Blog1971 (9) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent was a firm carrying on business of manufacturing silk, carbon papers, typewriter ribbons, liquor, spirituous drugs and chemicals, etc. In respect of the assessment year 1955-56, the respondent had sent a return showing Rs. 51,214 as taxable income. On looking into the accounts and other records, the Income-tax Officer made several additions to the amount shown in the return and, ultimately, fixed the total assessable income in the sum of Rs. 3,30,474. On appeal, the amount was reduced and the taxable income was fixed in the sum of Rs. 2,09,575. In the further appeal by the assessee to the Appellate Tribunal, there was no alteration in this figure. Only two items which were added to the income and which have been accepted by all the authorities require to be noticed. They are : Pharmaceuticals section Rs. 77,518.00 Chemicals section Rs. 9,900.00 Relating to the pharmaceuticals section, it is the view of the Income-tax Officer that some of the sale bills produced by the respondent were found to be forged ones and some of the purchasers of tincture were also fictitious persons. There was no evidence produced by the assessee to show that the kolae powder, which was very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items relating to the pharmaceuticals and chemical sections, there has been a concealment of three more items totaling Rs. 32,267. They were : Silk business : shortage in twisted silk yarn Rs. 14,545.00 Shortage in artificial silk Rs. 3,434.00 Carbons : unaccounted consumption Rs. 14,288.00 It was on this basis that the total penalty was levied. On appeal to the Appellate Assistant Commissioner, the latter, no doubt, deleted these three items totaling Rs. 32,267 from the penalty proceedings, but confirmed the order of the Income-tax Officer regarding the two other items holding that the omission by the assessee to include the said two items amounted to the firm concealing particulars regarding its income under section 28(1)(c) of the Act. The penalty amount levied by the Income-tax Officer was also confirmed. Though the Appellate Assistant Commissioner reduced the quantum of concealment---even assuming that there has been a concealment---he did not make any reduction in the penalty actually levied by the Income-tax Officer. The assessee carried the matter in appeal before the Income-tax Appellate Tribunal, Madras Bench. The main grievance made by the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular two items which are the subject of penalty proceedings and the order of assessment in that regard has become final. Hence, it follows that this is a case where the assessee has concealed the particulars of its income or has deliberately furnished inaccurate particulars of its income. Both the Income-tax Officer as well as the Appellate Tribunal have in the penalty proceedings gone elaborately into this aspect before levying penalty. The approach made by the Appellate Tribunal when it set aside the orders levying penalty is not justified in law. Therefore, he urged that the High Court should have directed the Appellate Tribunal to state a case and refer the question of law as prayed for by the appellant. The respondent has not entered appearance before us. We have been taken through the entire proceedings leading up to the order levying penalty. We have also gone through the reasons given by the Income-tax Officer for levying penalty as well as the order of the Appellate Assistant Commissioner confirming the same. We cannot accept the contention of Mr. Dhebar that the Appellate Tribunal has summarily interfered with the orders levying penalty. We have gone through the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that there is not much of an independent discussion regarding the material question that has to be considered, namely, whether the firm has concealed the particulars of its income or whether it has deliberately furnished inaccurate particulars of such income. On the other hand, the Income-tax Officer, after referring to the explanation furnished by the assessee to the show cause notice, clearly says that the facts relating to the unaccounted items have been fully discussed already in the relevant assessment orders for the concerned assessment year and that the reasons given therein need not be repeated again. Then there is only a very summary disposal of the plea raised by the respondent that he has not concealed the particulars of his income, nor has it deliberately furnished inaccurate particulars of its income. The approach made by the Appellate Assistant Commissioner is not far different from that of the Income-tax Officer. In fact the Appellate Assistant Commissioner makes a further guess that in view of the fact that there were very many dry areas bordering Mysore, the respondent would have, surreptitiously sold alcohol that was supplied to it without using it for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out in the said decision that the finding given in the assessment proceeding for determining or computing the tax is not conclusive though it may be good evidence. It has been further held by this court in the above decision : " Before penalty can be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars." From the above it is clear that penalty proceedings being penal in character, the department must establish that the receipt of the amount in dispute constitutes income of the assessee. Apart from the falsity of the explanation given by the assessee, the department must have before it before levying penalty cogent material or evidence from which it could be inferred that the assessee has consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount is a revenue receipt. No doubt the original assessment proceedings, for computing the tax may be a good item of evidence in the penalty pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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