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TMI Blog1979 (5) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, Amritsar, on three grounds, (1) that since the CIT as a result of the settlement between the partners of the firm and the revenue imposed a lesser penalty than the minimum imposable under s. 271(1)(c)(iii) of the I.T. Act, the prosecution stands statutorily barred by s. 279 of the Act ; (2) that according to the terms of the settlement arrived at between the partners of the said firm and the Commissioner, Amritsar, the question of launching of criminal prosecution had to be considered on merits, that is, after hearing the partners of the firm, including the petitioner ; and (3) that the petitioner was merely a sleeping partner and had not signed any document including the return and, therefore, there was no mens rea on her part and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the following : (a) suitable spread over assessment years 1968-69, 1969-70 and 1970-71. (b) penalty under section 271(1)(c) may be imposed, not exceeding a sum total of Rs. 66,826, Rs. 53,766, Rs.525 and approximately Rs. 5,000, representing the difference of money charged on sales of goods and money paid on purchase of goods as recorded in the mundi behi. (c) Registration to be granted. (d) No separate additions in the trading account and in partner's hands for alleged low withdrawals or cash credits for the assessment year 1970-71 in partner's account. (e) No separate notice-reopening cash credits amounting to Rs. 1,78,916 in mundi behi and Rs. 25,900 in the original books. (f) No adverse inference about alleged ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfactory reasons for late filing of the returns. The ITO to consider this at the appropriate time. The assessee and partners have agreed to all these terms. Inform all concerned. Sd. S. N. Mathur C.I.T. 28-2-1974 Sd. Hem Raj Kapur Sd. Nirmala Kapur Sd. Arun Kumar Kapur 28-2-1974 Sd. D. S.Sandhu IAC(C), Ludhiana Sd. M. L.Aggarwal 28-2-1974 Sd. Kulwant Rai 28-2-1974." Now, coming to the submissions of the learned counsel for the petitioner, he referred to para. 2 of the settlement, which mentions the imposition of penalty of Rs. 1,26,200, and contended that according to the provisions of s. 271(1)(c)(iii), the minimum penalty imposable on the income concealed for the assessment year 1970-71 had t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the assessment year 1970-71, which pertained to the four items of profit that were suppressed from the return of income of the firm. These items are : (1) An item of Rs. 66,826 which represents the sale of imported wool- tops-licences, the proceeds of which had been recorded in the mundi behi ; (2) An item of Rs. 53,766 which represents the particulars of the entries recorded in the mundi behi pertaining to Messrs Talwar Spinners representing inflation in purchases account ; (3) Rs. 5,000 Both representing the difference in the money charged on sales and paid on purchases of goods as (4) Rs. 525 recorded in the mundi behi. I find considerable merit in the stand taken by the department. It was for this very reason, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable regarding only Rs. 1,26,117 which the person representing the firm conceded as much, apart from the proof that was available from the mundi behi regarding the said amount and, therefore, the department imposed a penalty of Rs. 1,26,200 and not more because that was the part of the settlement in cl. (b) of the proposal which the firm had proposed that the penalty should not exceed the aggregate of the said sums. The penalty imposed by the department exceeds that sum only by Rs. 83. Hence, the penalty amount of Rs. 1,26,200, being more than hundred per cent. of the concealed income of Rs. 1,26,117, it is that sum alone which can be considered to be concealed income, as positive proof regarding that was available with the department. (Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, it is a question of fact as to whether the petitioner was a sleeping partner and was or was not knowledgeable as to what was happening. A letter was addressed by all the three partners, including the petitioner herself, to the Commissioner dated February 28, 1974, making an admission that she had been sharing the profits that found a mention in the mundi behi. Prima facie this should give an inkling of the fact that if she was sharing the profits in that manner then she knew as to what was happening, but I express no final opinion in this regard. It is a matter which the court while trying the case would find for itself on the basis of the material adduced before it. As regards the passage of a considerable time between the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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