Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 – Penalty – For concealment of income – Assessment year 1968-69 – Assessee was filing return on accrual basis – During accounting year relevant to assessment year in question, income by way of dividend was declared and special remuneration to him by resolution of certain company in which he was director was sanctioned – However, assessee did not include both these items either in return for relevant assessment year or of subsequent assessment year – Whether there was concealment of income on assessee's part and hence imposition of penalty on assessee under section 271(1)(c) was justified in law – Held, yes FACTS The assessee had been filing his returns on the accrual basis. During the accounting year relevant to the assessment year in question, a dividend income was declared and a special remuneration to him by the company of which he was director, was sanctioned. But the assessee did not include either of these two items in his return for the relevant assessment. He also not included these two items of income even in the return filed for the subsequent assessment year. The IAC holding that the assessee was guilty of concealment of income, imposed the penalty on the sum of the income which was concealed. The Tribunal upheld the order of the IAC. On reference : HELD The items not included by the assessee in the return for the relevant assessment year were receipts in the nature of income. There could, hence, be no getting away from the conclusion that the department had clearly established concealment of income on the part of the assessee. On the facts and in the circumstances of the case, the imposition of penalty could not be held to be unjustified in law. The order of the Tribunal was, therefore, justified. Note : The case was decided against the assessee. JUDGMENT Satish Chandra, J.—The Inspecting Assistant Commissioner, Kanpur, imposed on the assessee a penalty in the sum of Rs. 59,476, being the amount of income concealed, for the assessment year 1968-69. The concealed income consisted of two items. One was dividend income of Rs. 24,750. This amount was declared as dividend by Messrs. Straw Products Ltd.,…

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