Law: Income Tax Act, 1961

Section: 256(2),271(1)(c),Explanation2

Income tax----Reference Penalty Concealment of income Second return filed for assessment year 1983 84 including cash credits after concealment was discovered I. T.O. accepting second return and completing assessment ¬Assessee crediting the additional income shown in assessment year 1983 84 in the partner's account for assessment year 1984 85 Finding that Explanation 2 to S. 271(1)(c) of the Indian Income tax Act, 1961 was applicable Second return filed for 1983 84 would not amount to revised return Tribunal was justified in confirming order of penalty and no question of law arose Indian Income tax Act, 1961, Ss. 256(2) & 271(1)(c), Explanation 2. The petitioner was a firm. For the assessment year 1983 84, the petitioner submitted a return on April 28, 1984, disclosing a total income of Rs. 2,74,510. The Income tax Officer wrote to the assessee pointing out certain cash credits and other credit balances not accounted for and, therefore, the assessee was asked to furnish evidence to prove the source of the said credits. The assessee then filed another return on December 22, 1984, which included an additional amount of Rs. 2,50,000. The Income tax Officer passed the assessment order on December 28, 1984, accepting the return filed on December 22, 1984. Subsequently, in the course of the assessment for the assessment year 1984 85, the Income tax Officer found that the accounts of the partners were credited with a total sum of Rs. 2,50,000 in proportion to their profit sharing ratio alongwith a narration that these credits represented additional income offered for assessment in the assessment year 1983 84. Penalty proceedings were initiated and penalty was imposed. The Tribunal found that the Explanation 2 to section 271(1)(c) of the Indian Income tax Act, 1961, applied and the so called revised return for the assessment year 1983 84 was not filed voluntarily before the concealment was detected and confirmed the order of penalty. On an application to direct reference: Held, dismissing the application, that the explanation of the assessee had not been accepted by any of the authorities and concealment of income, as a matter of fact, was found by all the three…

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