Law: Income Tax Act, 1922

Section: 28,28(1)(c)

Indian Income Tax Act, 1922 (XI of 1922)-Section 28 (1) (c) Penalty-Concealment of income --Default in furnishing accurate particulars of income-Past clean records of assessee -Whether always material or relevant for levying penalty - Held no. The fact that the past record of the assessee was clean or that there was no motive at all in not disclosing the true profits because the assessee had been disclosing its profits for a number of years in the past as well as in the subsequent years in one year or the other is not always material or relevant for levying penalty under section 28(1)(c) of the Act, for default of the assessee in furnishing accurate particulars of income. Held, on the facts and in the special features of the case, that the penalty levied for the year 1952-53 in respect of one item of concealed income was not justified but the penalty was justified in respect of the other item of income. ORDER [The judgment of the court was delivered by SATISH CHANDRA, J.]-- M/S. U. P. Tannery Company Private Limited, Kanpur, the assessee, carries on the business of tanning raw hides. For the assessment year 1952-53 the Income Tax Officer levied a penalty of Rs. 44,741 under section 28(1)(c) of the Indian Income Tax Act, 1922, for default of the assessee in furnishing accurate particulars of income in its original return. The penalty was imposed on account of two items, one of Rs. 1,10,088 and the other of Rs. 4,96,868. The Ending was that the assessee had deliberately concealed particulars of its income in respect of these two items. On appeal, the Appellate Assistant Commissioner held that the explanation of the assessee for non-inclusion of the items of Rs. 1,10,088 was plausible and believable. He, therefore, deleted the penalty in relation to this item. With regard to the other item, namely of Rs. 4,96,868 he confirmed the finding of the Income Tax Officer that the assessee had been guilty of deliberately furnishing incorrect particulars of its income and as such he imposed a penalty of Rs. 37,500 in relation to it. Both sides went up in appeal to the Tribunal. The Tribunal discussed the matter in detail with regard to the item of Rs. 4,96,868. It gave its…

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