Law:

Section:

section 271(1)(c) of the income-tax act, 1961-penalty-for concealment of income-minor sons of assessee filed separate returns, declaring their income from share dealings and share speculation-ito added minors' income to assessee's income holding that school-going minor children could not appreciate technicalities of said business-on reference by ito, iac levied penalty for concealment-whether tribunal right in confirming penalty imposed-held, on facts, yes section 256 of the income-tax act, 1961-reference-general principles-before iac and tribunal, assessee contested imposition of penalty on him on certain ground but never questioned jurisdiction of iac to impose penalty in view of amendment of section 274(2) [as it stood prior to 1-4-1971]-whether question of jurisdiction could be raised for first time in reference-held, no Facts The assessee filed his return for the assessment year 1970-71 on 30-4-1971. His two minor sons B and M had separately filed returns, declaring income from share dealings and share speculation. The ITO completed the assessment on 14-3-1973 by including the minors' income in the assessee's income, holding that these school-going minor children could not appreciate the technicalities and intricacies of the business, particularly of the share dealing and share speculation. He also initiated penalty proceedings and referred the same to the IAC under section 274(2). The IAC ultimately levied a penalty of Rs. 25,000. On appeal before the Tribunal, the assessee's only contention was that in view of the ,inter alia, of the Supreme Court in CIT v. Anwar Ali [1970] 76 ITR 696 , no penalty could be levied on the assessee. The Tribunal, however, sustained the penalty order on the grounds given by the ITO. On reference, the assessee contended : (i) that the relevant dates of return/assessment would show that the initiation of penalty proceedings must have taken place after 31-3-1971 when the change in law had taken place and the IAC had no jurisdiction to levy penalty in the assessee's case ; and (ii ) that this question, even though not canvassed before the Tribunal, was only an aspect of the broad question referred to the Court. Held 1. The…

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