9911796707
TMI Blog1993 (12) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... ndigarh, was subsequently released on payment of fine of Rs. 12,500. The books of account of the assessee did not reflect any entry relating to the payment of the above fine. The assessee filed the return showing income of Rs. 41,280 for the relevant period and the same was accepted under section 143(1) vide order dated 20 November, 1987. Later on, the Assessing Officer got information of payment of penalty of Rs. 12,500. Having found that the aforesaid payment is not shown in the books of account, the Assessing Officer initiated reassessment proceedings by issuing notice under section 148 of the Income-tax Act on 9-12-1988. 3. In response to the aforesaid notice, the assessee filed a return declaring income of Rs. 53,777, which included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set up by the assessee as an 'after-thought'. The assessee was held to have concealed particulars of income to the tune of Rs. 12,500. The levy of penalty was challenged in appeal before the DCIT (Appeals) who agreed and confirmed the levy and dismissed the appeal of the assessee. The issue has been brought up in appeal before the Appellate Tribunal. 6. I have heard the parties. I have also examined the material available on record. The learned counsel for the assessee, Shri Ravinder Krishan reasserted the submissions advanced before the lower authorities and drew my attention to the claim made in writing in the letter dated 1 September, 1989 submitted with the return. He further drew my attention to copy of letter dated 14 March, 1990 fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t amount was invested by the partnership but above presumption was required to be considered along with other material available on record. In the present case it was claimed by the assessee that the amount in dispute was contributed not by the partnership but by partners in proportion to their shares of profit and as fine was not a permissible deduction under the Act in the hands of the firm. The amount was not debited in the books of the firm. This claim had been rejected as a 'story' and as an 'after-thought'. But I see neither legally nor factually justification for rejecting this claim. A firm under the law has no existence separate from the partners and a partner as agent is fully authorised to make payment for and on behalf of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer adopted the second course and instead of accepting the surrender, issued notice under section 143(2) calling upon the assessee to prove the case pleaded in the revised return. He passed an order rejecting the claim on merit. As already observed, he held the claim to be an 'after-thought'. But the aforesaid conclusion is without any basis or material and is unjustified. In response to notice under section 143(2) of the Act, the assessee in its letter dated 14 March, 1990 replied to the questionnaire issued on 26 February, 1990 and the relevant portion of reply is as under : "Please find enclosed separately the explanation of sales-tax penalty imposed along with the proof of funds taken for paying of penalty of Rs. 12,500." Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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