Law: Income Tax Act, 1961

Section: 271(1)(c)

Income-tax---Penalty---Concealment of income---Contractor obtaining amount with interest thereon from Public Works Department under decree---Failure to disclose interest---Imposition of penalty and confirmation of order by Tribunal was valid---Setting aside of order awarding interest subsequent to order of. Tribunal was not relevant---Indian Income Tax Act, 1961, S.271(1)(c). The assessee filed a suit for recovery of money due to him from the Public Works. Department of the State of Bihar, The suit was decreed on, September 13, 1965 in favour of the assessee for the sum of Rs.52,386 with costs. The amount so decreed included interest to the extent of Rs.11,352 for the period from February 8, 1961, to September 13, 1965. The assessee received the decreed amount as well as the interest on March 20; 1967. The assessee did not maintain any books of account. He was a contractor and derived income from contract work and plying of trucks. His income was being assessed on estimate, and was on receipt basis. For the assessment year 1967-68 the assessee filed his return of income on August 18, 1968 but did not show the amount of interest received by him in his return. The Income-¬tax Officer while completing the assessment included Rs.11,352, as income from other sources. The assessment of this amount for the year 1967-68 was accepted by the assessee. Thereafter, the Income-tax Officer initiated proceedings under section 271(1)(c) of the Income Tax Act, 1961, in respect of the addition and imposed penalty. The Tribunal found that the fact regarding the decree and the receipt of interest had not been indicated in either the return for the assessment year 1966-67 or the return for 1967-68; that both the returns were filed on August 28, 1968; that the plea that the income was not assessable in 1967-68 and was, therefore, not shown appeared to be merely an excuse; that the assessee had not indicated this fact even in the earlier year; that the assessee had also accepted the assessment of this amount in this assessment year. The non-disclosure of this amount was held by the Tribunal to be wilful. The order of penalty was confirmed by the Tribunal. On a reference: Held, that…

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