Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1962-63 - Assessee was a partner in a firm and she also admitted her minor sons to benefits of partnership - For assessment year in question she had not included income of minor sons in her return of income and her sons were assessed separately - However, ITO included share income of her minor sons from partnership firm as her income under section 64 and completed assessment - Whether on facts it could be said that assessee had complied with requirement of Part III of form of return and therefore, it could not be said that she had without reasonable cause failed to furnish return of income under section 139(1) or had concealed particulars of income or had deliberately furnished inaccurate particulars of income attracting penalty under section 271(1)(c) - Held, yes FACTS The assessee was a partner in a firm. Her three minor sons were also admitted to the benefits of the partnership. For the relevant assessment year, the assessee and her sons were separately assessed in respect of their shares from the firm. In the return filed by her, she had not included in her total income the shares of profit of her minor sons from the firm. She had, however, pointed out in Part III(c) of the return that the particulars were 'as per firm's return'. Part III(c) of the form of return requires that the assessee should show the relationship with other partners which she had failed to mention. After the assessment was over, the ITO reopened the assessment and called upon the assessee to file a fresh return. Again the return was filed in the same manner. The ITO however, while completing the assessment included the income of her minor sons from partnership in her income under section 64 and reassessed her accordingly. The ITO initiated proceedings under section 271(1)(c) and finally the IAC imposed penalty on the assessee. On appeal, the Tribunal held that no penalty was leviable on the assessee. On reference : HELD Section 64 in terms places the responsibility of including the income of a minor in that of the individual assessee on the ITO. There is nothing to indicate in this…

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