Law: Income Tax Act, 1961

Section: 256,271(1)(c)

Income-tax----Reference---Penalty---Concealment of income-tax---Finding in assessment proceedings that income was earned by assessee-HUF .in a benami name--¬Penalty for concealment of income imposed on HUF---Tribunal whether justified in cancelling penalty is a question of law---Income Tax Act, 1961, Ss.256, 271(1)(c). The assessee was the Karta of a Hindu undivided family. During the assessment proceedings, the Income Tax Officer found that the income earned from an insurance agency in the name of P belonged to the assessee. The income was assessed in the hands of the assessee and subsequently penalty was imposed. The Tribunal cancelled the penalty. On an application for reference: Held, that the question whether the Tribunal was justified in cancelling the penalty was a question of law which had to be referred. JUDGMENT V. K. SINGHAL, J---The Revenue by an application under section 256(2) of the Income Tax Act, 1961, has prayed for giving an appropriate direction to the Income Tax Appellate Tribunal to refer the following questions of law which arise out of its order, dated July 22, 1983, in respect of the assessment years 1967-68 to 1970-71: "(i) Whether, on the facts and in the circumstances of the instant case, the Tribunal was justified in holding that the view taken by it in the quantum appeal cannot be adopted as such in the penalty proceedings and no penalty can be sustained on that account? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there is no conclusive proof and convincing evidence to hold that the insurance income belonged to the assessee Hindu undivided family in total disregard of its own finding in the quantum appeal, vide order dated November 28, 1975, that the whole theory of earning of income from insurance agency by Shri Prabhu Dayal Sharma was a concocted one and the said income was earned, received and enjoyed by Shri Roop Kishore Goyal as Karta of his Hindu undivided family? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalty imposed by the Inspecting Assistant Commissioner under section 271(1)(c) of the…

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