1978 (3) TMI 16

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....were Rs. 7,700 for the assessment year 1955-56, Rs. 38,500 for the assessment year 1956-57 and Rs. 7,000 for the assessment year 1961-62. These amounts brought to tax were said to be dividend income of the assessee in respect of 15,400 equity shares of M/s.Jute Carriers (P.) Ltd. standing in the names of 12 persons. As per the settlement with the department in the year 1964-65, the assessee agreed that those 15,400 shares standing in the names of 12 persons might be treated as his shares for the purpose of assessment in its hands of the money invested for the purchase of those shares. The assessee had opposed the reassessments bringing to tax the amounts representing the dividends in respect of the aforementioned 15,400 shares, inter alia, ....

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....d the period of limitation. Therefore, the Tribunal overruled this objection. Another contention was that the IAC did not consider about the receipt of the income. There was no question of evidence of non-disclosure of income by the assessee for which penalty could be imposed. The Tribunal, however, for the reasons mentioned in the earlier assessment orders, held, inter alia, as follows : " After carefully considering the rival submissions of the learned representatives for the assessee as well as for the department, we are of the view that this is a fit case for the imposition of penalty. It can be gathered from the orders of the lower authorities that the assessee was the moving spirit behind the affairs of M/s. Jute Carriers (P.) Ltd.....

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....by the Finance Act, 1968, does not relate to purely procedural matter but affects the right of an assessee Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 (SC) and Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262 (SC)]. In view of this, we direct the ITO to levy a penalty of 30% on the tax sought to be avoided for the three years under appeal. In any event, the penalty to be worked out should not exceed Rs. 4,000, Rs. 6,000 and Rs.800 for the assessment years 1950-51, 1952-53 and 1954-55, respectively. " Upon this, under s. 256(1) of the I.T. Act, 1961, two questions were referred to this court. The said questions are as follows : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was c....