1987 (1) TMI 43

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....1948-49 was valid and legal ? (2) If the answer to question No. (1) is in the affirmative, whether the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961, in relation to the return filed in the reassessment proceedings was valid and legal ? " The assessment year we are concerned with is the assessment year 1948-49. The assessee is M/s. R. B. Shreeram Durgaprasad & Fatechand Narsinghdas (Export Firm ), Tumsar. There is another firm called R. B. Shreeram Durgaprasad (Mining Firm). Both these firms kept common accounts. Their accounting year was the Samvat year. The year in question began on October 25, 1946, and ended on November 12, 1947. The assessment of the assessee (the Export Firm) for the assessment year 1948-....

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....sponding entries, being cash credits, had been entered in an account called the "Malewar Haste" account in the combined books of the assessee and the mining firm and appeared on February 21, 1948, February 24, 1948, and February 29, 1948. These incomes from undisclosed sources were includible in the assessment of the assessee for the assessment year in question. There was another account in the same books in which there were cash credit entries between February 21, 1948, and February 29, 1948, also aggregating to Rs. 1,40,000. The Income-tax Officer held that the source of these cash credits was not explained and included half the aggregate amount, that is, Rs. 70,000, in the assessment of the assessee. He also found a cash credit entry of ....

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....he first question that the assessment of the assessee for the assessment year 1948-49 had been reopened under section 147(a) of the Income-tax Act, 1961, on the strength of the provision contained in section 297(2)(d)(ii) of the said Act. This provision entitled the taxing authorities, notwithstanding the repeal of the Indian Income-tax Act, 1922, to issue a notice under section 148 of the said Act where, in regard to any assessment year after the year ending March 31, 1940, any income chargeable to tax had escaped assessment within the meaning of that expression under section 147 and no proceedings under section 34 of the repealed 1922 Act in respect of such income were pending at the commencement of the 1961 Act. Mr. Thakkar submitted tha....

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.... sought a reference of and which the Tribunal, for the reasons stated in paragraph 29 of the statement of the case, declined to refer. In respect of this refusal, the assessee filed no application under section 256(2) of the 1961 Act. It is, therefore, not open to the assessee on both counts to raise the only argument that Mr. Thakkar sought to raise on its behalf in regard to the first question that we have to answer. It must, accordingly, be answered in the affirmative and in favour of the Revenue. In regard to the second question that we have to answer, Mr. Thakkar submitted that there was no case of concealment and that, therefore, the penalty was unjustified. Reliance was placed by Mr. Thakkar upon the judgment of the Supreme Cou....