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TMI Blog1972 (9) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Appellate Assistant Commissioner and the Appellate Tribunal, but the assessments made by the Income-tax Officer were confirmed. Thereafter, the Income-tax Officer passed penalty orders under section 18A(9)(a) of the Act. We shall show herein below in a tabular form the incomes estimated by the assessee, the incomes returned by him, the incomes finally assessed and the penalties imposed for the several years : -------------------------------------------------------------------------------------------------------------------------------------------------- Assessment Estimated Income finally Penalty years income returned determine imposed -------------------------------------------------------------------------------------------------------------------------------------------------- Rs. Rs. Rs. Rs. 1953-54 30,000 53,150 1,06,566 6,580 1955-56 Loss 28,725 1,06,230 10,308 1956-57 15,000 29,157 95,940 19,978 1957-58 25,000 1,46,946 1,79,569 25,320 1958-59 Nil 70,862 1,71,441 18,744 -------------------------------------------------------------------------------------------------------------------------------------------------- The penalty orders were impugned ; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's income from undisclosed sources, and, on that basis, a penalty of Rs. 66,000 was also imposed on the assessee. On appeal, the Tribunal held that no penalty could be imposed on the basis that the onus lay on the assessee to explain the omission to mention this amount, and pointed out that the law was that the onus lay on the revenue to show by adequate evidence that the amount concerned was really of a revenue nature and the assessee had concealed it. The Tribunal went further and held that the mere rejection of the explanation of the assessee was not sufficient to hold that he concealed the income or be submitted a false return or a return which he had reason to believe to be false. This decision was approved by the High Court and was also approved by the Supreme Court. Another decision brought to our notice by Mr. Swaminathan is again of the Supreme Court, viz., Hindustan Steel Ltd. v. State of Orissa. In that decision, the Supreme Court has observed that an order imposing penalty for failure to carry out a statutory obligation was the result of a quasi-criminal proceeding ; and that penalty would not ordinarily be imposed, unless the party obliged either acts delibera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rupees. Similarly, for the third and fourth years also, the disparity between the estimated incomes and the incomes finally determined were very wide. And for the last year, the estimate of the income was nil, while the income for which he was finally assessed was over one lakh of rupees. Thus, the wide disparity between the estimated incomes and the assessed incomes is a consistent feature for all the years and not a casual feature in one year. All these circumstances taken together will go to show that the assessee was deliberately estimating his income at low figures-even as nil or as loss in some years-and was paying advance tax on that basis. And months later, when the assessments came on quite higher amounts, he paid the balance tax. The reason is obvious: the assessee had been retaining the amounts and using them for months together. Therefore, it goes without saying that the assessee knew, or had at least reason to believe, that the estimates he was giving were false. In this connection, our attention has been drawn by the counsel for the revenue to decisions of the Supreme Court like Karam Chand Thapar and Bros. P. Ltd. v. Commissioner of Income-tax, Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years only), is one under section 297(2) of the Act of 1961. Clauses (f) and (g) of section 297(2) read : " (f) any proceeding for the imposition of a penalty in respect of any assessment completed before the 1st day of April, 1962, may be initiated and any such penalty may be imposed as if this Act had not been passed ; (g) any proceeding for the imposition of a penalty in respect of any assessment for the year ending on the 31st day of March, 1962, or any earlier year, which is completed on or after the 1st day of April, 1962, may be initiated and any such penalty may be imposed under this Act. " In all these cases, the penalties were imposed under the Act of 1922. The argument of Mr. Swaminathan is that the penalty orders for the two years mentioned above come under clause (g) of section 297(2) and not under clause (f), so that the Act applicable is the Act of 1961 and not the Act of 1922. The argument is based on the following facts. The penalty orders were passed by the Income-tax Officer in all these cases on 5th May, 1966. The assessment order by the Income-tax Officer for 1957-58 was dated 15th October, 1958. The matter was taken in appeal ; and ultimately, the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel. As we have already indicated, the Supreme Court considered in that case the expression "proceedings for the assessment " which evidently connoted the entire proceedings, whereas the expression we have to consider in clause (f) is " assessment completed ". It cannot be said that an assessment is completed only when the Tribunal or the High Court ultimately pronounces on its correctness: It is completed when the assessing authority completes his work and passes an order. Clause (f) of section 297(2) deals with a case where the assessment is completed before the first day of April, 1962 ; and clause (g) deals with a case where the assessment is completed after that date and the assessment was for the year ending 31st March, 1962, or any earlier year. Between these two clauses, all the cases of assessments completed before 1st April, 1962, and completed after 1st April, 1962, for the year ending 31st March, 1962, or any earlier year, are exhausted. In this connection, the decision of the Supreme Court in Commissioner of Income-tax v. Singh Engineering Works P. Ltd. may also be referred to, wherein the Supreme Court has held that section 297(2)(g) applied. Thus, on the language o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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