9911796707
TMI Blog1991 (4) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... d 3 below. The assessee is hereinafter referred to as the respondent. In a search of the respondent's premises made on January 12, 1977, the books of account including the stock register and inventories were seized by the petitioner. The respondent filed his income-tax return for the assessment year 1977-78 (accounting year ending on December 31, 1976) declaring an income of Rs. 85,200. An examination of the books of account of the respondent revealed that the value of the closing stock for the assessment year in question was Rs. 12,17,726. The respondent had declared the value of such stock to be Rs. 10,36,385. The respondent's explanation of this discrepancy was this : (i) There were duplication of entries in the stock register which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... His reasons were : (a) Since the details of the respondent's stock were known to the petitioner who possessed all the account books for the 11 months preceding the filing of the income-tax return, the element of secrecy which is the essence of concealment was absent from the transaction, and (b) Since the petitioner knew the position of the stock and its value from the account books in his possession, the respondent cannot be said to have concealed the particulars of his income. The Income-tax Appellate Tribunal, Cochin Bench, by its order dated December 22, 1983, in I. T. A. No. 321 / (Coch.) of 1982, confirmed the decision of the Commissioner of Income-tax (Appeals) whereby the penalty was cancelled. Whether a "question" "arises" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of an answer because the respondent, relying upon the proviso to Explanation 1 to sub-section (1) of section 271 of the Act, urged that his explanation being bona fide, his failure to substantiate his explanation about the discrepancy in the value of the stocks does not attract penalty. If the respondent, by reason of the bona fides of his conduct, has, as he claims, a complete answer to the charge of concealment of income, the question may be answered in his favour. But the question does not cease to exist ; indeed, the existence of an answer accentuates the presence of the question. The Income-tax Appellate Tribunal made its order under section 254 of the Act. The question whether the respondent "has concealed the particulars of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a document as in CIT v. Sivakasi Match Exporting Co. [1964] 53 ITR 204 (SC), or a finding which depends upon the interpretation of statutory provisions as in Liquidators of Pursa Ltd. v. CIT [1954] 25 ITR 265 (SC), illustrate how the apparently factual character of a question may, in reality, be a question of law. Where, as in this case, the ultimate finding that the respondent has concealed particulars of his income is an inference to be drawn from the admitted discrepancy in the value of the closing stock, the explanation offered by the respondent and consideration of the true meaning of "concealment" the essence of which is secrecy and deception, what we have is a mixed question of law and fact. And where there is a mixed question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Laxmi Auto Stores [1977] 106 ITR 626. The judgments in these cases were in answer to references under section 256 of the Act and the question whether a reference ought to have been made did not arise for consideration. For the reasons stated in the foregoing paragraphs, we hold that question of law arises out of the order of the Income-tax Appellate Tribunal made under section 254 of the Act. We, therefore, direct the Incometax Appellate Tribunal, Cochin Bench, to state the case and refer the following question to the High Court under section 256 (2) of the Act: "Whether, having regard to the facts and circumstances of this case and having regard to the provisions of section 271(1) of the Act, the Appellate Tribunal was right in holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
