Law:

Section:

Section 271(1)(c), read with section 64(1)(i), of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment years 1973-74 to 1975-76 - Assessee and his wife had no income other than share income from firm - They had equal shares in firm - In his return assessee did not include income of his wife and, therefore, penalty was levied on him - Whether in such a case it could not be determined in whose income, income of other spouse was to be included and, therefore, in such a situation, no occasion was provided for imputing to assessee any charge of concealment of income and there was, therefore, no warrant for imposition of any penalty upon him - Held, yes Facts The assessee and his wife had one-third share each in a firm B. Separate returns filed included the amounts received by them from the firm and were assessed accordingly. In course of income-tax proceedings against the firm for the year 1977-78, the ITO noticed that the assessee had not included his wife's income from the firm in his return and initiated action. Fresh assessments for the three years, namely, 1973-74, 1974-75 and 1975-76, were completed. Penalty was imposed of Rs. 2,288, Rs. 8,546 and Rs. 11,665 for the years 1973-74, 1974-75 and 1975-76, respectively, for non-disclosure of income of his wife from the firm. This order was upheld in appeal by the AAC.The tribunal held that as the assessee and his wife did not have any income other than share income from the firm b, it could not even be determined under section 64(1)(i) and Explanation 1 to section 64(1) as to income of which spouse was to be included in the income of the other assessee and as such there was no concealment of income by the assessee by not including his wife's income from the firm in his return. On reference : Held In the instant case, the assessee and his wife had no income other than the income from the firm in question. From the reading of section 64(1)(i) and Explanation 1 thereunder it could not be determined in whose income, the income of the other spouse was to be included. In such a situation, no occasion was provided for imputing to the assessee any charge of concealment of income and there was,…

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