Law:

Section:

Income tax---Penalty Concealment of income Assessee partner in several firms Accounts of firms not finalised Assessee disclosing in his return interest in some firms Actual figures of profit in respect of such firms included at time of assessment Penalty not leviable for avoidance of tax Interest in some other firms not disclosed in return of income--Penalty, held, exigible in such a case. Bibi Gurdarshan Kaur v. C. I. T. (1964) 51 I T R 1 (Punj.) and Mansukhlal & Brothers v. C.I. T. (1969) 73 I T R 546 (S C) ref. JUDGMENT C. S. P. SINGH, J. The Income tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following question for our opinion "Whether for purposes of imposing penalty under section 271(1)(c), the Tribunal was right in holding that the income shown in the return should be taken into consideration ignoring the share of income from various other firms, which the assessee had disclosed in the return without indicating the figures of profit or loss ?" The assessee is an H. U. F. and derives income from various sources including share income firms. In the assessment year 1964 65 with which we are concerned in the present reference, it filed a return in which it disclosed the extent of its interest in two firms, Messrs Hanuman Dass Kasari Prasad, Kanpur, and Messrs Mahabir Yarn & Co., Kanpur. There was a note in the relevant column of the return to the effect that the accounts of these firms were not finalized. It appears that as the accounts of these firms were not ready, and the assessee did not know the extent of the profit that it would receive in respect of its share in these firms, it did not include any specified amount as income from these firms. During the course of assessment, the I. T. O. was apprised of the income that the assessee received from these two firms. It also came to his knowledge that the assessee was also a partner in another firm, viz., Messrs Anand Yarn .& Co., and that its income from that firm had been determined at Rs. 2,130. A notice under section 271(1) (c) was issued to the assessee for showing cause as to why penalty should not be imposed for concealing its income. The I. A. C., New Delhi, after…

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