TaxTMI 
TaxTMI 
1981 (11) TMI 56
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.... which the assessee had disclosed in the return without indicating the figures of profit or loss ?" The assessee is an HUF and derives income from various sources including share income from firms: In the assessment year 1964-65 with which we are concerned in the present reference, it filed a return in which it disclosed the extent of its interest in two firms, M/s. Hanuman Dass Kasari Prasad, Kanpur, and M/s. Mahabir Yarn & Co., Kanpur. There was a note in the relevant column of the return to the effect that the accounts of these firms were not finalized. It appears that as the accounts of these firms were not ready, and the assessee did not know the extent of the profit that it would receive in respect of its share in these firms, it d....
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..../s. Anand Yarn & Co. We have to refer to s. 271(1)(c)(iii) as it stood at the relevant point of time for the purposes of testing the correctness of this contention: " 271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person- . ...... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,-. ......... (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than twenty per cent. but which shall not exceed one and a half times the amount of the tax, if any, which would have....
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....which he is a partner are made up. Section 155(1) of the I.T. Act, 1961, and s. 35 of the Indian I.T. Act, 1922, realising this, took ample care by making provision for rectification of partner's assessment on the assessment of the firm in which the assessee was a partner, being finalised. The position then is that an assessee can file a return showing the income which he has actually received, and in respect of income which he may receive on being a partner in firms whose accounts have not been finalised, it is sufficient for him to include, in the relevant part of the return, the interest which he has in those firms. The question arises as to whether in such a situation penalty can be imposed on an assessee on the ground that there is var....
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....s return had been accepted, the penalty in the present case was exigible only on the amount of tax which the assessee avoided on his income from M/s. Anand Yarn & Co., which amounted to Rs. 2,130. Counsel for the department urged that for a correct interpretation of s. 271(1)(c)(iii), the subsequent amendment made in cl. (iii) by the Finance Act, 1968, may also be looked into. His contention is that under cl. (iii), as it stood, once there was a variance in the returned income, and the assessed income, penalty become leviable on the difference. It was contended that this created undue hardship, with the result that the Legislature amended cl. (iii), and made penalty leviable only on the amount of income of which particulars had been conc....