1961 (6) TMI 21 - HC - Income Tax

Assessee found guilty of concealment under Income-tax Act

Sivagaminatha Moopanar & Sons Versus Commissioner of Income-tax

The court found the assessee guilty of concealment of income or deliberately furnishing false particulars in the return under section 28(1)(c) of the ... - Issues Involved:1. Whether the assessee was guilty of concealment of income or deliberately furnishing false particulars in the return within the meaning of section 28(1)(c) of the Income-tax Act.2. The relevance of the timing of the disclosure of the true particulars of income by the assessee.3. The impact of subsequent voluntary disclosure on the applicability of section 28(1)(c).Issue-wise Detailed Analysis:1. Concealment of Income or Deliberately Furnishing False Particulars:The Tribunal found that the assessee's case of inflation of prices in the invoices was not true and that the invoices truly represented the value for which the goods were sold. Consequently, the books maintained by the assessee did not represent the transactions correctly. The return based on these books could not properly reflect the true income of the assessee during the relevant year. This led to the conclusion that there was a deliberate concealment of income or furnishing of false particulars.2. Timing of Disclosure:The Tribunal noted the time-lag between the original return filed on October 25, 1945, and the disclosure of the invoices and prices on March 6, 1946. The Tribunal concluded that the disclosure was not a voluntary act but was prompted by the department's discovery of similar discrepancies in the previous year's assessment. The court emphasized that the intention behind the original return is crucial. If the original return was false and the correct particulars were disclosed only after the department's intervention, it indicates a deliberate concealment.3. Impact of Subsequent Voluntary Disclosure:The court held that the mere fact of subsequent disclosure of true particulars does not absolve the assessee from the applicability of section 28(1)(c). The essential requirement is whether there was a deliberate concealment or furnishing of false particulars at any time. The court referenced several cases to support this view:- Radha Rukmani Ammal v. Commissioner of Income-tax [1957] 31 ITR 704: Concealment must be conscious and deliberate.- Commissioner of Income-tax v. Gokuldas Harivallabhdas [1958] 34 ITR 98: The burden of proving concealment lies on the department.- Khemraj Chagganlal v. Commissioner of Income-tax [1960] 38 ITR 523: Failure to establish an explanation does not automatically imply deliberate suppression.- Arunachalam Chettiyar v. Commissioner of Income-tax [1931] 6 ITC 58: Subsequent disclosure does not negate the initial deliberate false return.- Ayyasami Nadar v. Commissioner of Income-tax [1956] 30 ITR 565: Deliberate concealment in the original return cannot be rectified by subsequent disclosure.The court concluded that the assessee's disclosure of full particulars was not voluntary but induced by the department's discovery of discrepancies. Thus, the original return contained deliberate concealment or false particulars.Conclusion:The court answered the question in the affirmative, holding that the assessee was guilty of concealment of income or deliberately furnishing false particulars in the return. The assessee was ordered to pay the costs of the department.