Law: Income Tax Act (XI of 1922)

Section: 28

Income tax Act (XI of 1922)---   ----- Ss. 28 & 66(4) Penalty-Appellate Assistant Commissioner Power to issue notice for levy of penalty Reference Scope of S. 66 (4).   Section 28 of the Income tax Act, 1922 enables the Appellate Assistant Commissioner to take action under that section if in the course of any proceedings under the Act he is satisfied that any person has, inter alia, concealed the particulars of his income or deliberately furnished inaccurate particulars of such income. The Appellate Assistant Commissioner can exercise such power even in cases where the Income tax Officer has not issued such notice.   Subsection (4) of section 66 of the Income tax Act, 1922, cannot be invoked for the purpose of requiring the Tribunal to refer to the High Court a question of law which the Tribunal has refused to refer to the High Court. JUDGMENT   S. K. DAS, J. This is an appeal by special leave from the judgment and order of the High Court of Allahabad dated July 16, 1956, by which the said High Court decided a question referred to it under section 66(1) of the Indian Income tax Act, 1922, against the assessee. The question was in these terms :   "Whether the Appellate Assistant Commissioner was legally justified in issuing a notice under section 28 of the Income tax Act in the circumstances of the case of the applicant in respect of the item of Rs. 76,836 ?"   We may first state the relevant facts. The assessee, appellant before us, is a partnership firm which ran a sugar mill at Cawnpore and dealt in the manufacture and sale of sugar. The process adopted by the assessee for the manufacture of sugar involved the conversion of gur into sugar. In the relevant assessment year 1942 43, the account year being October 1, 1940, to September 30, 1941, the assessee submitted a return of income and on the basis of that return the Income tax Officer concerned made an assessment on November 30, 1944. When making this assessment the Income tax 0ff"icer added to the income shown by the assessee two sums of Rs. 63,954 and Rs. 76,836. The sum of Ps. 63,954 was added in respect of the market value, as calculated by the Income tax…