Judgment:
Janarthanam, J.
1. Shri P. Govindaswamy, residing at No. 7, Brahadam-bal Street, Madras-34, is an assessee falling within the jurisdiction of the Inspecting' Assistant Commissioner of Income-tax (Assessment--Range No. I), Madras--the Assessing Officer.
2. The assessee is not maintaining any books of account. There was search of the premises of the assessee and certain materials were seized. He submitted only cash flow statement. Even the cash flow statement so submitted was changed suiting to the exigencies of the situation.
3. The Assessing Officer, on the seized materials during the course of search, came to the conclusion that there was either concealment of income or inaccurate particulars of such income. Consequently, he made an addition of Rs. 2 lakhs for the assessment year 1981-82 to the assessee's income, as the income from undisclosed sources. He also added a sum of Rs. 1,11,000 being the interest income.
4. The assessee challenged the abovesaid additions, by preferring an appeal before the Commissioner of Income-tax (Appeals), Madras (the CIT (A)).
5. Before the Commissioner of Income-tax (Appeals), the assessee was not successful as relatable to the addition of Rs. 2 lakhs to his income from undisclosed sources. He was, however, successful in getting deletion of a sum of Rs. 1,11,000 being the interest income added on to his income.
6. The aggrieved assessee preferred an appeal before the Income-tax Appellate Tribunal (Madras Bench C), Madras--for short 'the Tribunal'--against the addition of Rs. 2 lakhs to his income from undisclosed sources.
7. The Revenue, on the other hand, also preferred an appeal before the Tribunal, as respects the deletion of Rs. 1,11,000 being the interest income added to the income of the assessee.
8. Before the Tribunal, the assessee conceded as respects the addition of Rs. 2 lakhs to his income from undisclosed sources and consequently, his appeal was dismissed.
9. So far as the Revenue's appeal was concerned the Revenue, in fact, conceded and stated before the Tribunal that out of the sum of Rs. 1,11,000 only a sum of Rs. 64,042 being the interest income is traceable in the hands of the assessee. The assessee also conceded such a position.
10. In view of the concession, as relatable to the interest, as had been made by the Revenue and also accepted by the assessee, the Tribunal passed an order accordingly.
11. In the result, the assessee's appeal was dismissed and the Revenue's appeal was partly allowed, as indicated above.
12. Penalty proceedings had also been initiated against the assessee under Section 271(l)(c) of the Income-tax Act, 1961 (Act No. 43 of 1961-for short 'the I. T. Act'), as relatable to the concealment of income to the tune of Rs. 2 lakhs from undisclosed sources and also interest income to the tune of Rs. 64,042.
13. In fact, a notice has been issued to the assessee calling' for his objections to the proposals for the levy of penalty under Section 271(i)(c) of the Income-tax Act. The assessee kept mum and did not at all reply. In such a situation, the Assistant Commissioner of Income-tax, Central Circle 1(4), Madras-34, came to the conclusion that the levy of penalty under Section 271(l)(c) of the Income-tax Act was called for and imposed a minimum penalty of Rs. 1,29,936.
14. The assessee faced colossal failure in the appeals, he preferred before the Commissioner of Income-tax (Appeals) and the Tribunal, as relatable to the imposition of levy of penalty upon him.
15. The assessee filed an application under Section 256(1) of the Income-tax Act to refer to this court the questions of law, as below, for its opinion :
'(1) Whether, on the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal was right in law in upholding the validity of the penalty under Section 271(l)(c) of the Income-tax Act, 1961, and in holding that the burden of proof was on the assessee ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was guilty of concealment of income to the extent of Rs. 2,64,042 without taking into account relevant materials and basing itself on irrelevant materials ?'
16. The Tribunal held that no referable question of law arose out of the order of the Tribunal and consequently dismissed the reference application, giving rise to the present action--Tax Case Petition No. 757 of 1997.
17. The questions of law, as framed and stated above, we rather feel, do not at all reflect the real controversies arising from the order of the Tribunal. The questions so framed therefore have to be necessarily reframed, we do so accordingly. The- reframed questions will read as under :
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the penalty levied under Section 271(l)(c) of the Income-tax Act, as had been done by the Assessing Officer and latterly confirmed by the Commissioner of Income-tax (Appeals) and the Tribunal as well for the assessment year 1981-82
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was guilty of concealment of income to the tune of Rs. 2,64,042 for the assessment year 1981-82 ?'
18. Section 271(1)(c) of the Income-tax Act, relevant for our present purpose, reads, as under :
'271. Failure to furnish returns, comply with notices, concealment of income, etc.--(1) If the Income-tax Officer or the Deputy Commissioner of Income-tax (Appeals) or the Commissioner (Appeals) 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 but which shall not exceed twice, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing' of inaccurate particulars of such income : Provided that, if in a case falling under Clause (c), the amount of income (as determined by the Assessing Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished exceeds a sum of twenty-five thousand rupees, the Assessing Officer shall not issue any direction for payment by way of penalty without the previous approval of the Deputy Commissioner. . .'
19. A cursory perusal of Clause (c) of Sub-section (1) of Section 271, as extracted above, will reveal the parameters for imposition of penalty. Either of the parameters, namely, concealment of particulars of income or inaccurate particulars of income must be there, before even the levy of imposition of penalty was called for.
20. In the instant case, the addition of Rs. 2 lakhs was made to the income of the assessee, as income from undisclosed sources by the Assessing Officer, besides a sum of Rs. 1,11,000 being the interest income. Though the assessee disputed such additions before the Commissioner of Income-tax (Appeals), he faced dismal failure, as relatable to the addition of Rs. 2 lakhs to his income from undisclosed sources, though he was successful in getting deletion of Rs. 1,11,000 being the interest income. In the further appeal he has made, as respects the addition of Rs. 2 lakhs to his income from his undisclosed sources, the pity is that he had conceded before the Commissioner of Income-tax (Appeals) that he was not pressing the appeal and, consequently, the appeal was dismissed. That is a clear indication of his admission of concealed income to the tune of Rs. 2 lakhs being added to his income for the assessment year 1981-82.
21. The Revenue, on its part, before the Tribunal conceded that the assessable income in the hands of the assessee as relatable to the interest was only to the tune of Rs. 64,042 out of Rs. 1,11,000. The concession so extended by the Revenue, as already indicated, has been accepted by the assessee and, consequently, a consensual order in that regard had been passed by the Tribunal. This also indicates the assessee's admission of concealment of income relatable to interest to the tune of Rs. 64,042. Under Section 58 of the Evidence Act admitted facts need not at all be proved. On such admitted facts, the Tribunal acted and consequently, passed orders as indicated above. In such circumstances, it cannot at all be stated that the Tribunal was not right in upholding the levy and imposition of penalty upon the assessee under Section 271(l)(c) of the Income-tax Act, for the assessment year 1981-82. It also cannot at all be stated that the Tribunal was rather not right in holding' that the assessee was guilty of concealment of income to the tune of Rs. 2,64,042.
22. In this view of the matter, we are of the view that the Tribunal was rather right in rejecting the reference application. Consequently, this tax case petition is dismissed. No costs.