Law: Income Tax Act, 1922

Section: 66,28(1)(c)

Section 271(1)(c), read with section 256(2) of the Income-tax Act, 1961 (corresponding to section 28(1)(c), read with section 66(2) of the Indian Income-tax Act, 1922) - Penalty - For concealment of income - Assessment years 1955-56 to 1958-59 - While completing assessment, revenue authorities concluded that though two fixed deposit receipts stood in name of wife of 'M' i.e. karta of assessee-HUF, they represented assets of assessee and thus interest income on said deposits was to be included in assessee's returns - As assessee concealed this income, penalty was levied under section 28(1)(c) of 1922 Act - High Court even rejected assessee's application for reference holding that no referable question of law arose from Tribunal's order - On instant appeal, it was seen that amounts of both fixed deposits were included by assessee in its wealth tax returns as assets - There was no evidence that these amounts had been gifted by assessee to wife of one of coparceners - Amounts of these two fixed deposits receipts were subsequently taken back by karta of assessee-HUF from his wife to meet loss from business - Whether, in aforesaid circumstances, burden which lay on department of proving concealment of income on assessee's part was fully discharged - Held, yes - Whether, therefore, High Court rightly held that no question of law arose from Tribunal's order - Held, yes FACTS While completing the assessments, the revenue authorities came to the conclusion that though two fixed deposits receipts stood in the name of the wife of 'M' (i.e. karta of assessee HUF), they represented the assets of the assessee and hence the interest income from the fixed deposit receipts should have been included in the returns of the assessee but the assessee had concealed this income and not shown it in its returns and thus rendered itself liable to penalty under section 28(1)(c) of the 1922 Act. The ITO, accordingly, imposed penalty on the assessee for each of the assessment years and, the orders imposing penalty were confirmed by the AAC in appeal and, on further appeal, they were confirmed by a consolidated order made by the Tribunal. The reference application filed was also rejected by…

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