Law:

Section:

Section 271(1)(c), read with section 297(2)(g), of the Income-tax Act, 1961 - Penalty - For concealment of income - ITO completed original assessments of assessee under the 1922 Act before 1-4-1962 - Subsequently, these assessments were reopened and the same were completed under the 1961 Act in 1969 on the basis of revised return filed by assessee declaring cash credits - IAC levied penalty under the 1961 Act invoking section 271(1)(c) - Whether tribunal justified in upholding levy of penalty in view of section 297(2)(g) - Held, on facts, yes FACTS The ITO completed the original assessments of the assessee for the years 1954-55 to 1961-62 under the 1922 Act before 1-4-1962. The assessee settled on 1-4-1961 all his properties and business on his son J who was assessed to Income-tax on the business profits earned thereafter. In the assessment proceedings of J for the assessment year 1962-63, the ITO noticed in the account books certain credits outstanding as borrowings on hundies and on enquiry he found that the relevant credit entries came to be made from 4-6-1960 and the peak of the credits as on 15-3-1962 was Rs. 6,80,000. As J could not prove that hundi borrowings represented real transactions, both the assessee and J filed two separate disclosure petitions under section 271(4A) before the Commissioner. The assessee submitted that the impugned cash credits did not represent the income in any one particular year and prayed that it be spread over for the assessment years 1954-55 to 1961-62. The assessee also agreed to pay a penalty of 5 per cent of the tax to be levied on the sums offered for assessment. The Commissioner accepted the petition and the assessee filed revised returns for the assessment years 1954-55 to 1961-62 in response to notices issued under section 148, admitting the additional amounts of income as shown in the disclosure petition. The ITO completed the assessments on 17-9-1969 accepting the revised returns of income. Later on, in the penalty proceedings initiated under section 271(1)(c), the IAC imposed on the assessee penalties at the rate of 20 per cent of the tax evaded in the original returns. He noted that the Commissioner had…

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