Income definition includes assessable income after deductions and exemptions, so false deduction claims attract penal liability.

The article construes the term "income" in Section 28 to include assessable income as computed after allowable deductions and exemptions, applying a purposive statutory interpretation that income throughout the Act is technical and determined by the computation provisions. It reasons that reading "income" narrowly would permit misstatement of deductions and undermine the assessment scheme; accordingly, a deliberate false claim of deduction falls within Section 28 and attracts penal consequence in favour of the revenue.

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Issues: Whether the word "income" in Section 28 of the Income-tax Act is limited to receipts in the popular sense or includes the assessable income computed after accounting for allowable deductions and exemptions, thereby attracting penal liability for false claims of deductions.

Analysis: Section 2(15) defines total income to be computed in the manner laid down in Section 16; Sections 3, 4 and 6 and Sections 7 to 12 regulate heads of income and methods of computing income after specified allowances; Sections 22 and 23 deal with return and assessment on the basis of the return. These provisions show that "income" throughout the Act is used in a technical sense as the figure arrived at after taking into account permitted deductions and exemptions. Reading Section 28 in isolation would allow an assessee to misstate deductions or exemptions while still alleging that "income" (in a narrow sense) was correctly declared, which would frustrate the statutory scheme for computing assessable income. The construction adopted must give effect to the Act's overall purpose of assessing true profits and gains by permitting deductions that are integral to computing assessable income.

Conclusion: The word "income" in Section 28 of the Income-tax Act includes the assessable income determined after accounting for legitimate deductions and exemptions; a deliberate false claim of deduction falls within Section 28 and attracts penal consequence in favour of the revenue.

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