TaxTMI 
TaxTMI 
1971 (9) TMI 19
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....the assessment year 1955-56, the respondent had sent a return showing Rs. 51,214 as taxable income. On looking into the accounts and other records, the Income-tax Officer made several additions to the amount shown in the return and, ultimately, fixed the total assessable income in the sum of Rs. 3,30,474. On appeal, the amount was reduced and the taxable income was fixed in the sum of Rs. 2,09,575. In the further appeal by the assessee to the Appellate Tribunal, there was no alteration in this figure. Only two items which were added to the income and which have been accepted by all the authorities require to be noticed. They are : Pharmaceuticals section Rs. 77,518.00 Chemicals section Rs. 9,900.00 Relating to the pharmaceuticals section, it is the view of the Income-tax Officer that some of the sale bills produced by the respondent were found to be forged ones and some of the purchasers of tincture were also fictitious persons. There was no evidence produced by the assessee to show that the kolae powder, which was very essential for the manufacture of tincture had been purchased by it. Hence, the Income-tax Officer drew an inference that the respondent had not really manufac....
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....shortage in twisted silk yarn Rs. 14,545.00 Shortage in artificial silk Rs. 3,434.00 Carbons : unaccounted consumption Rs. 14,288.00 It was on this basis that the total penalty was levied. On appeal to the Appellate Assistant Commissioner, the latter, no doubt, deleted these three items totaling Rs. 32,267 from the penalty proceedings, but confirmed the order of the Income-tax Officer regarding the two other items holding that the omission by the assessee to include the said two items amounted to the firm concealing particulars regarding its income under section 28(1)(c) of the Act. The penalty amount levied by the Income-tax Officer was also confirmed. Though the Appellate Assistant Commissioner reduced the quantum of concealment---even assuming that there has been a concealment---he did not make any reduction in the penalty actually levied by the Income-tax Officer. The assessee carried the matter in appeal before the Income-tax Appellate Tribunal, Madras Bench. The main grievance made by the assessee was that there has been no independent consideration by the Income-tax Officer or the Appellate Assistant Commissioner whether even on the basis that there has been an omi....
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....essee has concealed the particulars of its income or has deliberately furnished inaccurate particulars of its income. Both the Income-tax Officer as well as the Appellate Tribunal have in the penalty proceedings gone elaborately into this aspect before levying penalty. The approach made by the Appellate Tribunal when it set aside the orders levying penalty is not justified in law. Therefore, he urged that the High Court should have directed the Appellate Tribunal to state a case and refer the question of law as prayed for by the appellant. The respondent has not entered appearance before us. We have been taken through the entire proceedings leading up to the order levying penalty. We have also gone through the reasons given by the Income-tax Officer for levying penalty as well as the order of the Appellate Assistant Commissioner confirming the same. We cannot accept the contention of Mr. Dhebar that the Appellate Tribunal has summarily interfered with the orders levying penalty. We have gone through the order of the Appellate Tribunal and we find that it has considered the circumstances under which the additions came to be made by the department in the assessment proceedings as w....
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....s income or whether it has deliberately furnished inaccurate particulars of such income. On the other hand, the Income-tax Officer, after referring to the explanation furnished by the assessee to the show cause notice, clearly says that the facts relating to the unaccounted items have been fully discussed already in the relevant assessment orders for the concerned assessment year and that the reasons given therein need not be repeated again. Then there is only a very summary disposal of the plea raised by the respondent that he has not concealed the particulars of his income, nor has it deliberately furnished inaccurate particulars of its income. The approach made by the Appellate Assistant Commissioner is not far different from that of the Income-tax Officer. In fact the Appellate Assistant Commissioner makes a further guess that in view of the fact that there were very many dry areas bordering Mysore, the respondent would have, surreptitiously sold alcohol that was supplied to it without using it for the purpose of making tincture. It is the view of the Appellate Assistant Commissioner that the mere fact that there are excise authorities to control the activities of persons like ....