2001-VIL-358-DEL-DT
Equivalent Citation: [2001] 251 ITR 302, 168 CTR 297, 118 TAXMANN 31
DELHI HIGH COURT
Date: 13.03.2001
JAIN BROTHERS.
Vs
COMMISSIONER OF INCOME TAX.
BENCH
Judge(s) : ARIJIT PASAYAT., D. K. JAIN.
JUDGMENT
The judgment of the court was delivered by ARIJIT PASAYAT C. J.-Pursuant to the direction given by this court on an application under section 256(2) of the Income-tax Act, 1961 (in short "the Act"), the Income-tax Appellate Tribunal, Delhi Bench-D ("the Tribunal", in short), has referred the fallowing question for the opinion of this court :
"Whether, on the facts and in the circumstances of the case, the Tribunal acted on material in coming to the conclusion that penalty was imposable on the assessee for the assessment year 1971-72 ?"
As the question itself indicates, the dispute relates to the assessment year 1971-72.
The factual position, as noted in the statement of case, is as fellows :
The assessee, a partnership firm, consisted of four partners with a 25 per cent, share each. Its business was of selling steel pipes and tubes, etc., with its bead office at Delhi and branch at Calcutta. For the assessment year in question the previous year ended on Diwali, 1970. The assessee had filed its return on July 20, 1971, declaring an income of Rs. 4,64,890. The assessment was completed on a total income of Rs. 7,50,682. The assessee preferred an appeal to the Appellate Assistant Commissioner of Income-tax ("the AAC", in short). The said authority granted partial relief to the assessee and the total income was reduced to Rs. 6,05,877. Before completion of the assessments the Income-tax Officer initiated penalty proceedings under section 271(1)(c) of the Act and referred the matter to the Inspecting Assistant Commissioner ("the IAC" in short) under section 274(2) of the Act, as the amount in respect of which income had been concealed or inaccurate particulars of such income had been furnished exceeded Rs. 25,000. The Inspecting Assistant Commissioner, after issuing show-cause notice to, the assessee and after considering the assessee's objections in the show cause reply and written submissions filed from time to time held that the assessee had concealed its income and/or furnished inaccurate particulars of income to the extent of the claim of interest amounting to Rs. 61,181. Accordingly, it was held that penalty under section 271(1)(c) was leviable. The Inspecting Assistant Commissioner took note of the fact that the main addition made in the assessment order was disallowance of Rs. 61,181 representing interest on alleged loans from agriculturists. which the assessee had also accepted. Making a reference to the assessment order made for the assessment year 1956-57, it was held that the assessee was guilty of concealment of income. The acceptability of alleged loans from agriculturists was dealt with in the assessment orders for several years, i.e., 1956-57 onwards. Therefore, a minimum penalty of Rs. 61,181 was levied. The matter was carried in appeal before the Tribunal. Four appeals were dealt with by the Tribunal together. Three of them relate to the assessments made for the assessment years 1967-68 to 1969-70 while the fourth one relates to the case at hand. The Tribunal noticed that after it was brought to the assessee's notice that the so-called loans were not genuine, the assessee surrendered, after being cornered. Not only that, the assessee had introduced the amounts in question in its books accepting it to be belonging to the firm or its partners. That being the position, there being no scope for claiming interest on the so-called loans and rightly, therefore, it had been held that there was concealment of income or furnishing of inaccurate particulars of its income. Accordingly, the levy of penalty was upheld. The prayer was made for reference under section 256(1) of the Act which was rejected. However, on being moved, as noted above, a direction was given by this court for referring the question as set out above for the opinion of this court.
We have heard learned counsel for the Revenue. There is no appearance for the assessee in spite of notice.
Learned counsel for the Revenue submitted that after analysing the factual position in detail, the Tribunal has concluded that penalty was clearly leviable. That being the position no question of law arises out of the order of the Tribunal.
A few facts need to be noted to deal with the question referred. As has been indicated by the Tribunal, loans to the tune of over Rs. 1 crore were claimed to have been taken from different persons. A device of introducing them in the form of deposits from hundiwalas and agriculturists was adopted and some confirmatory letters were obtained. The so-called creditors did not come forward to claim those amounts and ultimately the assessee introduced the amounts in its books as belonging to it or its partners. The Tribunal found it interesting that people who had advanced such large deposits remained silent ; did not come forward to claim the amounts and ultimately allowed the assessee to become the owner of the amounts. A petition for settlement was filed by the assessee after proceedings for the assessment year 1957-58 were initiated for reassessment. A sum of Rs. 1,82,500 towards fictitious hundi loans was added in the income of the assessee. Investigations for the subsequent years were also going on and assessments already completed had been reopened. The Tribunal in fact noticed that the return for the assessment year in question was filed on july 20, 1971, while surrender had already been made in respect of the assessment years 1959-60 to 1966-67. In view of the aforesaid factual position, the Tribunal concluded that there was concealment of income and/or furnishing of inaccurate particulars of income so far as claim of interest is concerned. As the factual position goes to show, the amounts had been accepted to be belonging to the assessee and/or its partners and that is why these amounts were later on introduced in the books as belonging to the assessee or its partners. In the aforesaid factual backdrop, the conclusions of the Tribunal are essentially factual giving rise to no question of law. We decline to answer the question referred.
The reference is accordingly returned unanswered.
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