Law: Income Tax Act, 1922

Section: 28(1A),66,28(3)

Law: Income Tax Act, 1922

Section: 28(1A),66,28(3)

Income-tax Act, 1922 -- Sections 28(1A), 66, 23 read with Penalty -- Assessee doing business on commission basis and on own account -- Concealment of income from business on own account -- Penal provisions of Section 28(1A) whether attracted -- Held yes Question of fact -- Question of law Application of law to proven facts -- Cannot be said to relate to domain of facts because it falls properly within ambit of question of law -- Imposition of penalty -- Increase in income made on account of concealment and misrepresentation made by assessee -- Section 28(1-A), held, squarely attracted to facts of case and imposition of penalty justified -- Amount of penalty, however, reduced in circumstances of case -- JUDGMENT The Judgment of the Court was delivered by Mushtaq Hussain, J..---The assessee is an association of persons dealing in tobacco on the basis of commission. For the assessment year 1959-60 it submitted a return disclosing receipt of Rs.10,918.00. The Income Tax Officer, however, found that the assessee had been doing business on its own account also besides working as a commission agent, had been indulging in black marketing and evasion of excise duty. He consequently found that an addition of Rs.20,000.00 to the aforementioned receipts was justifiable. The assessee appealed to the Appellate Assistant Commissioner who found that there was no basis for holding that the assessee had indulged in black-marketing or evasion of excise duty. He nevertheless came to the conclusion that the assessee had failed to prove that some of the transaction entered in the books of account were in respect of business done on commission only and not on his own account. He consequently agreed that some extra profit had been made out of the transactions shown in the books of account, but he reduced the additional income from twenty to ten thousand rupees. 3. The assessee still felt dissatisfied and knocked the doors of the Tribunal which reduced the amount of additional income to eight thousand rupees. 4. On the basis of his findings, the Income Tax Officer imposed a penalty of Rs.2,976.09 under section 28 (1-A) of the Income Tax Act. This penalty was remitted by the Appellate…

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