Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1969-70 - Assessee was a partner in a firm and had filed a return declaring share income from firm - Assessing Officer held that firm was not a genuine firm and income earned in name of firm was assessee's income and, therefore, included entire income from firm in assessee's income - For concealment of income, Assessing Officer also imposed penalty upon assessee under section 271(1)(c), which was upheld by appellate authorities - Whether penalty imposed upon assessee was justified - Held, yes C.K. Garg, Pradeep Kulwaria and Saransh Saini for the Applicant. Anuroop Singhi for the Respondent. ORDER 1. On an application under section 256(1) of the Income-tax Act, 1961, Tribunal has referred the following questions for the opinion of this Court: "Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in upholding the levy of penalty under section 271(1)(c) of the Income-tax Act, 1961 ? Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in concluding that the assessment on the Association of persons had no effect on the levy of penalty ?" 2. The case of the assessee is that assessee was a partner in M/s. Ranu Brothers (Contracts) alongwith Shri Rajaram and Shri Rahul Bhargava. He had income from property also. He declared share income from M/s. Ranu Brothers (Contracts) at Rs. 35,028. The I.T.O. held that the firm Ranu Brothers (Contracts), which had closed, is not a genuine firm and the income earned in the name of firm M/s. Ranu Brothers (Contracts) is income of the assessee and include the entire income from that firm in the hands of the assessee, which amounted to Rs. 51,378. The total income of the assessee assessed in the assessment…

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