Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty-For concealment of income - Assessment year 1972-73 - Assessee derived share income from three firms namely 'BD', 'KC' and 'MC' - In return filed through his chartered accountant, he declared income only from firm 'BD' - Another return was filed after two days through a different counsel disclosing income from firm 'KC' - ITO found that assessee was partner in firm 'KC' and, thus, imposed penalty on him for not disclosing share income from firm 'KC' in first return - Assessee pleaded that inadvertent omission to disclose in first return share income from firm 'KC' was due to two different counsels dealing with assessment of said two firms - As regard income from firm 'MC', assessee stated that return was subject to adjustment in respect of share of profit or loss from 'MC', intimation of which had not been received till then - Whether on facts, there was no intention on part of assessee to conceal income and, therefore, imposition of penalty under section 271(1)(c) on assessee was not justified - Held, yes FACTS The assessee during the previous year relevant to the assessment year in question derived share income from three firms, namely 'BD', 'KC' and 'MC'. He filed a return through his chartered accountant declaring share income from the firm 'BD'. After two days he filed another return through another representative declaring share income from the firm 'KC' but in said return income from the firm 'BD' was not shown. The ITO having found that the assessee was the partner in firm 'KC' and income of said firm was not included in the first return, called upon the assessee to explain why the share income from 'KC' be not included and why action for imposition of penalty might not be taken. The assessee stated that he forgot by oversight to inform his chartered accountant about the share of profits from 'KC', that the case of the firm 'KC'; was dealt with by another counsel who filed the second return in which the share income from that firm was shown ; that as two different counsels were dealing with the two firms, there was an inadvertent omission in disclosing in the first return the share income from 'KC'…

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