The assessee is a firm dealing in hessian, twines, gunny bags, etc.,
The income tax authorities might a different view and add that income but that addition would number attract penalty.
20,000 was imposed.
On that basis the penalty leviable, in the present case, would be 1.5 times the amount of tax on the difference between the tax on Rs.
The Appellate Assistant Commissioner in appeal held that only the item of Rs.
30,000 and taking into companysideration all the circumstances he imposed a penalty of Rs.
The rest of the additions on the ground of disallowance of certain expenditure and the addition of Rs.
45,904.
1,62,135 and Rs.
45,904 returned income and Rs.
20,000 only on the assessee.
In the words of the High Court the argument proceeded on the these lines The additions made by the income tax authorities or the Tribunal to the income returned by him companystitute part of the income as returned by the assessee.
24,000 and Rs.
A penalty of Rs.
The maximum penalty thus, which companyld have been imposed in the instant case, was one and half times the tax on the difference between Rs.
1,62,135 income as assessed by the Income tax Officer .
on wholesale basis.
The High Court was of the view that the expression income as returned occurring in section 28 1 c means income disclosed by an assessee in the return and number income companyputed or assessed by the income tax authorities minus the income added on the ground of companycealment.
90,000 added as income from undisclosed source.
90,000 companyld number be treated as such for the purpose of imposing a penalty.
On behalf of the revenue the position that was taken up and has been sought to be supported before us is that section 28 1 c provides that if an item of companycealment of income is discovered the maximum penalty which can be imposed is 1.5 times the difference between the tax on the total income as finally assessed and the tax on the income shown in the assessees return irrespective of the amount of companycealment.
In appeal the Appellate Tribunal agreed with the Appellate Assistant companymissioner that there was numberconcealment in the matter in respect of Rs.
90,000 but affirmed the finding of companycealment of the amount of Rs.
24,000 be treated as companycealed income and the other amount of Rs.
90,000 as profits and income from undisclosed sources which had been companycealed by the assessee.
24,000.
62,000 was imposed within the maximum limits provided by section 28 1 c of the Act.
48,135 as companyputed by the Income tax Officer and Rs.
The Income tax Officer, however, added two items of Rs.
It was held by the Tribunal that, as there had been companycealment of profit, it was wholly immaterial whether one item or more than one item had been companycealed and the quantum had to be companyputed under section 28 l c number on the basis of tax on the items proved to have been companycealed but on the difference between the tax on the assessees income as finally assessed and the tax which would have been avoided if the return filed by him had been accepted as companyrect.
1,38,135 Rs.
90,000 as income from undisclosed source, are parts of the income returned by the assessee.
For the assessment year 1948 49 the assessee had returned income amounting to Rs.
In his opinion maximum penalty payable under section 28 1 c came to Rs.
Grover J. This is an appeal by special leave from a judgment of the Bombay High Court in a reference made under section 66 1 of the Income tax Act, 1922, hereinafter called the Act, answering the following question which had been referred to it in the negative and against the assessee Whether in companyputing for purposes of levy of penalty under section 28 1 c the amount of income tax and super tax which would have been avoided if the income as returned had been accepted such income as returned includes item of income too, which though number actually returned had been added in the assessment solely on ground of lack of evidence ?
