Law:

Section:

Section 271(1)(c) of the income-tax act, 1961-Penalty-For concealment of income-ITO made on agreed basis certain additions covering both increase in peak credit of bogus loans and deficiency in gross profit in contract business-IAC levied penalty for concealment under Section 271(1)(c ) which was sustained by commissioner in revision-Whether commissioner justified-Held, on facts, yes Facts The assessee-firm was carrying on business as building contractors and dealers in tiles. For the assessment year 1963-64, the ITO made, on agreed basis, a consolidated addition covering both the increase in the peak credit of bogus loans and the deficiency in gross profit in contract business. Penalty for this concealment under section 271(1)(c) was levied by the IAC. The Commissioner rejected assessee's revision petition. On writ, assessee contended, inter alia, that (i) there was no material to establish that it had deliberately concealed the particulars of income; (ii) it had agreed to the additions towards the low gross profit only for the purpose of assessment and not for the purpose of penalty ; and (iii) mere fact that it had agreed for an addition would pot lead to inference that there had been a deliberate concealment on its part. Held 1. Once the assessee agrees for an addition in the assessment without demur, that can lead to the inference that he has concealed the particulars of income or filed an inaccurate return in that year. 2. Even assuming that the condition for non- levy of penalty for the concealment was imposed by the assessee, such a condition could not be given effect to. In the fact of the statutory provision in section 271(1)(c)i once the deliberate concealment is found, the said section will stand attracted and its applicability does not depend upon the assessee's consent or otherwise. 3. Thus, the inference drawn by the revenue that the assessee should be taken to have deliberately concealed the particulars of income by his conduct in agreeing to the addition being made to his income was, justified. The impugned order was, therefore, sustained and the petition dismissed. Case review Addl. CIT v. E. Bhoopathy [1978] 113 ITR 188 (Mad.) and A.K. Bashu…

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