1970 (2) TMI 29 - HC - Income Tax

Petition Dismissed for Lack of Legal Questions

The court dismissed the petition as the issues raised did not constitute legal questions arising from the Tribunal's order. It emphasized that the ... Reference to HC - when question of jurisdiction was not raised before the Tribunal, whether the High Court can direct reference on the issue Issues:1. Jurisdiction of the Inspecting Assistant Commissioner to levy penalty based on Income-tax Officer's satisfaction during assessment proceedings.2. Invocation of section 271(1)(c) by the Inspecting Assistant Commissioner in the absence of proceedings before him.3. Justification of confirming penalty for alleged concealment when income was estimated.Jurisdiction of Inspecting Assistant Commissioner:The petitioner sought direction to refer questions of law regarding the jurisdiction of the Inspecting Assistant Commissioner to levy penalty based on the Income-tax Officer's satisfaction during assessment proceedings. The petitioner argued that the penalty imposed lacked a finding attributing the escaped income to any specific act by the assessee. However, the court held that the Tribunal was not required to refer a question that was not raised during the proceedings before them. The court emphasized that the jurisdiction issue was not brought up before the Tribunal, and thus, it cannot be considered a question of law arising from the Tribunal's order.Invocation of Section 271(1)(c):The petitioner questioned the invocation of section 271(1)(c) by the Inspecting Assistant Commissioner in the absence of specific proceedings before him. The court analyzed the necessity for the Tribunal to refer questions of law arising from their order to the High Court. It highlighted that for a question to arise, there must be a misapplication of law, error of jurisdiction, or unreasonable inference on proved facts in the Tribunal's order. Since the jurisdiction issue was not raised before the Tribunal, the court concluded that the Tribunal's decision was not incorrect in this regard.Confirmation of Penalty for Alleged Concealment:Regarding the confirmation of the penalty for alleged concealment when the income was estimated, the petitioner argued that the revenue should have determined the portion of income deliberately suppressed versus that which escaped due to normal circumstances. The court referred to a previous case where deliberate concealment colored the entire transaction, obviating the need for further probe into specific portions of escaped income. The court found that in the absence of proper accounts and the speculative nature of the revised return, there was no error in the Tribunal's decision to confirm the penalty. It concluded that no question of law arose from the Tribunal's order, dismissing the petition with costs.Conclusion:The court dismissed the petition, emphasizing that the questions raised did not constitute legal issues arising from the Tribunal's order. The court held that the Tribunal was not obligated to refer questions that were not presented during the proceedings before them. The judgment underscored the importance of raising relevant issues before the Tribunal for consideration and subsequent referral to the High Court, maintaining the statutory process under the Income-tax Act, 1961.