James Finlay and Co. Ltd. vs Commissioner of Income Tax

Dipak Kumar Sen, J.—In this application u/s 261 of the Income Tax Act, 1961, the petitioner contends that substantial questions of law arise from the judgment in the above reference from which an appeal is sought to be preferred to the Supreme Court by the assessee.

Relying on a circular issued by the Central Board of Revenue No. 27(44-IT/52) dated 6th October, 1952, which was in force at the relevant time, the assessee credited interest receivable from his debtors in a suspense account instead of disclosing it in its return based on accounts kept on mercantile basis.

The substantial question of general importance which arises is that if there are two views on a particular issue and if the assessee proceeds on the basis of one view, whether there is deliberate concealment so as to attract penalty u/s 271(1)(c) of the Act ?

This court in Income Tax Officer and Others Vs. Burmah Shell Oil Storage and Distributing Co. of India Ltd., and in the case of Jeewanlal (1929) Ltd. Vs. Income Tax Officer, ''J'' Ward and Another, , took a view in favour of the assessee on the issue. In the judgment before us, a view in favour of the Revenue has been taken.

We find this is a fit case for appeal to the Supreme Court and a certificate u/s 261 of the Act is directed to be issued. There will also be an order in terms of prayer (b).

Let the order directing issue of certificate be drawn up separately.

G.N. Ray, J.

I agree.