TaxTMI 
TaxTMI 
2007 (3) TMI 214
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee died in February, 1966. However, prior to his death, the assessee has gone for two settlements with the Department. In fact the demands of income-tax were raised based on settlement and according to counsel for the petitioner, the total tax payment exceeds total tax liability and the petitioner and other legal heirs of the late assessee are entitled to refund. However, penalty levied for the above three years and confirmed in revisions is still outstanding. I have heard senior counsel Sri V. Ramachandran who appeared for the petitioner along with Sri Harun-al-Rashid and Sri P. K. R. Menon, senior standing counsel appearing for the respondents. Both sides have furnished the argument notes and I have gone through the same also. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....In the circumstances, levy of penalty is tenable as the assessee during his lifetime and his legal heirs thereafter failed to settle the arrears of tax in terms of the settlement but made payments only after decades of the settlement and that too in coercive proceedings. The next ground of challenge is that the assessee was sick and bedridden and consequently he was not in a position to receive notice and effectively represent against levy of penalty. On the facts, the Commissioner clearly found that penalty was levied after issuing detailed notice and after giving opportunity to the late assessee. I do not think the petitioner as a legal heir is entitled to contest penalty on the ground that the assessee was not heard which case the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nalty proceedings on the ground of limitation is also rejected. The last ground of challenge is against the merits of the case. Senior counsel for the petitioner pointed out that the onus of proof of concealment of income is on the Department and until amendment was introduced in the 1961 Act in section 271(1)(c) of the Act, no penalty could be levied under section 41(1)(c) of the Travancore Income-tax Act or section 28(1)(c) of the Indian Income-tax Act, 1922 without establishing mens rea. He has relied on the decisions of the Supreme Court in Anantharam Veerasinghaiah and Co. v. CIT [1980] 123 ITR 457, CIT v. Khoday Eswarsa and Sons [1972] 83 ITR 369 and CIT v. Anwar Ali [1970] 76 ITR 696 and contended that without establishing mens re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r section 41(1)(c) for this year was only Rs. 40,754 and that too only when the assessee and his legal heirs failed to settle the liability in terms of the settlement. Therefore I do not find any ground to interfere with the penalty levied for 1950-51. For the year 1951-52 (1123 ME) the late assessee returned income of Rs. 34,236 and the original assessment completed was on an income of Rs. 91,242. The assessment was revised under section 47 of the Travancore Income-tax Act because the assessee did not include his share income from a private limited company under his control, that is M/s. A. Thangal Kunju Musaliar and Sons (P) Ltd. On reassessment, the income was redetermined at Rs. 3,30,175 which was confirmed in appeal by the Tribunal. Th....