Sheo Raj Saran vs Commissioner of Income Tax

The Income Tax Appellate Tribunal, New Delhi, has referred the following question of law u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion to this court :

"Whether, on the facts and circumstances of the case, the Tribunal was right in law in upholding the levy of penalty to the tune of Rs. 23,000 ?"

We have heard Shri Vikram Gulati, learned counsel for the assessee, and Shri A.N. Mahajan, learned standing counsel for the Revenue.

The present reference relates to the assessment year 1975-76. The applicant is a Hindu undivided family and carried on the business of money-lending at Badaun. It had not maintained any books of account. There was a search conducted by the Central excise authorities on November 11, 1974 in which certain papers, gold and other articles were seized. In the regular assessment proceedings the Tribunal has upheld the unexplained investment of Rs. 23,000. A penalty proceeding u/s 271(1)(c) of the Act was initiated and ultimately the Tribunal has upheld the imposition of the penalty of Rs. 23,000. It has found that the applicant has not maintained any books of account and has further disclosed its income for the assessment year 1975-76 only to the tune of Rs. 13,900. The assessee could not offer any plausible explanation before the Tribunal. The Tribunal has upheld the levy of penalty. We do not find any infirmity in the order of the Tribunal.

In this view of the matter, we answer the question referred to us in the affirmative, i.e., in favour of the Revenue and against the assessee. However, there shall be no order as to costs.