Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1969-70 - Assessee purchased a grape garden - They did not include profits received from said garden in their returns of income on ground that it represented agricultural income - ITO accepted returns and made assessments - Subsequently, ITO taking a view that grape garden could not have yielded such a large profits as shown by assessees, reopened assessments and added excess profits in income of assessees from other sources - IAC, on reference under section 274(2), found that there was concealment of income and accordingly levied penalty on assessees - Tribunal set aside order of penalty on ground that it was not assessees who had concealed particulars of income but firm of which they were partners - It further held that grape garden was owned by said firm and not by assessees as co-owners - Whether Tribunal had not considered question involved in instant case in right perspective after taking into account materials on record, and therefore, matter had to be remanded to Tribunal for consideration afresh - Held, yes (Matter remanded) FACTS The assessees purchased a grape garden. At the time of furnishing their return of income, they did not include the profits received from grape garden on ground that said profit represented agricultural income. The ITO accepted the returns and made the assessments. Subsequently, the ITO taking a view that grape garden could not have yielded such a large profits as shown by respondents-assessees, reopened assessment and held that excess profits should be treated as income of respondent-assessees from other sources. Accordingly, the assessments of the assessees were reopened and after adding their respective share income therefrom to their assessable income, the reassessments under section 147 were made. The ITO thereafter initiated penalty proceedings under section 271(1)( c) and referred the matter to the IAC in terms of section 274(2). The IAC after hearing the assessees, found that there was concealment of income and accordingly a sum of Rs. 50,000 was levied as penalty on each of the assessees. On appeal by the assessees,…

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