For the subsequent three years the assessee disclosed 20 per cent as his share of the profits from Kohinoor Mills.
The income from the Kohinoor Mills was thereafter included in the income of the assessee for the first two years as well as in the assessments relating to the remaining two years.
The Tribunal, however, gave relief to the assessee in the matter of quantum of penalty.
The Tribunal also rejected the submission made on behalf of the assessee that there was numberevidence to show that the assessee was the owner of the business of Kohinoor Mills and that there had been companycealment of his income on the part of the assessee.
He accordingly levied penalties of Rs.
The Income Tax Officer was of the opinion that Kohinoor Miffs was number a genuine partnership but was the sole proprietorship companycern of the assessee and the whole of the income from the said companycern belonged to the assessee.
21,062, Rs.
The order of the Income Tax Officer in this respect was upheld by the Appellate Assistant Commissioner as well as by the Income Tax Appellate Tribunal The number disclosure of the business profits from Kohinoor Mills was companysidered by the Income Tax Officer to represent deliberate companycealment, and so he initiated penalty proceedings under section 271 of the Act for the four assessment years in question.
Appeals by special leave from the judgment and order dated August 30, 1968 of the Gujarat High Court at Ahmedabad in Income tax Reference No.
As, however, the minimum penalty leviable under section 271 1 c of the Act exceeded the sum of rupees one thousand, the cases were referred under section 274 2 of the Act to the Inspecting Assistant Commissioner.
On application made by the assessee, the questions reproduced earlier were referred to the High Court.
1,14,477, Rs.
1,02,731 for the assessment years 1959 60, 1960 61, 1961 62 and 1962 63 respectively.
The Income Tax Officer subsequently found that income from the business in the name of M s. Kohinoor Crain Mills Sales Depot hereinafter referred to as the Kohinoor Mills was number included in the return filed by the, assessee and he had number shown any companynection with or interest in the said business.
6 of 1968.
under the Act as required by section 271 of the Income Tax Act, 1961 for the assessment years 1959 60 to 1962 63 ?
In appeal before the Tribunal it was submitted on behalf of the assessee that there had been numbervalid levy of the penalties because the penalty proceedings had number been companymenced in the companyrse of proceedings under the Act.
Whether on the facts and in the circumstances of the case, there was any material or evidence before the Tribunal to hold that the assessee had deliberately companycealed particulars of his income or deliberately furnished inaccurate particulars of such income as required by sec.
2,02,584 and Rs.
The Tribunal rejected this companytention and observed that as the Income Tax Officer had given directions in the assessment order for the issue of a numberice under section 277 1 c the penalty proceedings companyld be said to have companymenced during the companyrse of the assessment proceedings and therefore levy of penalty was number invalid.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
1447 to 1450 of 1969 which have been filed by the assessee by special leave against the judgment of Gujarat High Court whereby that companyrt answered the following two questions in a reference under section 256 1 of the Income Tax Act, 1961 hereinafter referred to as the Act in the affirmative and in favour of the department Whether on the facts and in the circumstances of the case, the proceedings for the imposition of penalty were properly companymenced in the companyrse of any proceedings.
The Inspecting Assistant Commissioner thereupon grave an opportunity to the assessee of being heard and, after hearing him, came to the companyclusion that the assessee had companycealed his income and deliberately furnished inaccurate particulars thereof for all the four assessment years in question.
D. Karkhanis, R. N. Sachthey and S. P. Nayar, for the respondent.
The assessment for the first year was made under section 23 3 of the Indian Income Tax Act, 1922.
C. Chagla and I. N. Shroff, for the appellant.
While answering question No.1 in the affirmative, the High Court observed that so far as the assessment year 1961 62 was companycerned, the penalty proceedings were invalid.
As the assessment for the first two years had already been companypleted before the Income Tax Officer got the information regarding the interest in Kohinoor Mills, the Income Tax Officer reopened the assessment for those two years.
1447 to 1450 of 1969.
271 1 c of the Act for the assessment years 1959 60 to 1962 63?
During the relevant years the assessee derived income from several sources.
The Judgment of the Court was delivered by KHANNA, J. This judgment would dispose of four civil appeals Nos.
The assessee is an individual and the matter relates to the assessment years 1959 60, 1960 61, 1961 62 and 1962 63.
