Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1964-65 - During course of assessment proceedings of assessee-firm, ITO noticed certain cash credits in books of account of assessee - ITO treated all those credits as income of assessee from undisclosed sources and also levied penalty under substantive provision of section 271(1)(c) on ground that assessee had concealed its income represented by cash credits - On appeal before Tribunal, department relied on Explanation to section 271(1)(c) and contended that as income returned by assessee was less than 80 per cent of income assessed he would be deemed to have concealed particulars of his income or furnished inaccurate particulars of such income unless he proves that failure to return correct income did not arise from any fraud or any gross or wilful neglect on his part - Tribunal repelled that contention on ground that authority below had acted upon basis that assessee would come under main provision of section 271(1)(c) and charge was not under Explanation and as such penalty could not be justified under Explanation - Whether view taken by the Tribunal was correct - Held, yes FACTS During the course of assessment proceedings of the assessee-firm, the ITO noticed certain cash credits in its account books in the names of certain parties. The ITO, being dissatisfied with the explanation of the assessee with regard to nature and source thereof, treated all those credits as income of the assessee from undisclosed sources. The ITO also initiated penalty proceedings with a view to levy penalty under section 274/271(1)(c) on the ground that the assessee had concealed its income represented by the cash credits. The IAC examined the items of cash credits separately and found that in respect of some cash credits the assessee had led no evidence and in respect of others the evidence led by it was not acceptable. He, accordingly held that all the cash credits had rightly been treated as the assessee's income inasmuch as he had not included this income in its return and was guilty of concealment. He, accordingly, levied a penalty of Rs. 35,754. On appeal before the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492