Law:

Section:

Section 271(1)(c) , read with sections 64 and 139 of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1962-63 - Whether assessee had obligation to disclose in return of income furnished by him income from dividend on shares standing in name of his wife and minor son - Held, no - Whether, therefore, no penalty could be imposed under section 271(1)(c) on assessee for non- inclusion of such income in his return - Held, yes FACTS The IAC imposed penalty under section 271(1)(c) on a finding that the assessee while making his return for relevant assessment year, had concealed the dividend incomes on shares standing in name of his wife and his minor son, and also certain cash credits had not been disclosed by assessee. On appeal, the Tribunal held that the assessee's contention regarding non-disclosure of dividend income in the names of his wife and minor son was sound and acceptable. As regards the cash credits, the Tribunal held that the penalty was not sustainable in view of the fact that the department had not proved either in the assessment or in the penalty proceedings that the impugned amount represented income of the assessee and it was concealed. On reference application : HELD In view of the decision of the Supreme Court in V.D.M.HM.M.HM. Muthiah Chetliar v. CIT [1969] 74 ITR 183, wherein it was held that the assessee was under no obligation to disclose incomes which are liable to be included by virtue of the provisions of section 64 and the position was sound whether in the new Act or under the old Act even though the footnote appended to the Form of return pursuant to the rules framed under the Act requires an assessee to make disclosure of income liable to be included under sections 60 to 64, it was to be held in the instant case that the assessee had no obligation to disclose in the return of income furnished by him the income from dividends on shares standing in the names of his wife and the minor son. In this view of the matter, the application was groundless and must be rejected. Note : The case was decided in favour of the assessee. CASES REFERRED TO CIT v. Anwar Ali [1970] 76 ITR 696 (SC), Radheshyam Ladia v. ITO…

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