1966 (10) TMI 19

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....eed that this question as framed does not arise on the facts and in the circumstances as set out in the statement of the case. We have, therefore, in order to bring out the exact scope of the matter upon which our opinion is sought, reframed the following question as arising out of the statement of the case : " Whether, on the facts and in the circumstances of the case, penal proceedings under section 28(1)(c) of the Indian Income-tax Act could be validly initiated against the assessee ? " The assessee is a firm consisting of four partners carrying on business in turmeric, ground-nuts, manures, etc., For the assessment year 1947-48, for which the accounting year ended on March 31, 1947, the Income-tax Officer did not accept the return of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t was based upon mere conjectures and the estimate made was without any basis, and, hence, the Income-tax Officer was asked to stay the proceedings till the appeal was decided. After the appeals were disposed of, the assessee was given a further opportunity of being heard on September 24, 1956. No further evidence was produced but it was contended that the firm having become dissolved no penalty can be levied. The Income-tax Officer having been satisfied that the assessee had concealed the particulars of his income through manipulation of accounts, held that the case attracted the provisions of section 28(1)(c) of the said Act. Accordingly, he levied a penalty of Rs. 10,000 on the assessee. Before the Appellate Assistant Commissioner, it w....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ving been raised on November 15, 1946, and November 16, 1946, when otherwise there would have been cash deficits, the assessee had deliberately manipulated its accounts. For these reasons, the Tribunal confirmed the order of the Appellate Assistant Commissioner. The book results were rejected by the Income-tax Officer and an estimate of income was made under the proviso to section 13 of the Act. The assessee took key loans of Rs. 16,000 and Rs. 11,000 from the Andhra Bank Ltd., on December 6, 1946, and December 10, 1946, respectively, but had shown these loans as having been raised on November 15, 1946, and November 16, 1946, i.e., earlier than when the loans were actually taken. This fact could not be controverted and it is incontrovertibl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... in our view, section 13 has no application to the facts and circumstances of this case. We have asked Mr. Shankar Rao, the learned advocate for the assessee, to show us what was the method of accounting which was not accepted by the assessing authorities and what was the method of accounting that was applied as a result of which the income was computed at Rs. 60,000 but he was unable to point out or satisfy us on this aspect of the matter. On the other hand, the Tribunal stated that the learned counsel for the assessee conceded that this is one of those cases in which an overall estimate has got to be made without meticulously examining every point in detail. In that view, the Tribunal estimated the income of the assessee for the year in ....