TMI Blog1988 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... the said section was not justified ? 2. Whether the disclosure of the prize money receipts in Part IV of the return of income could be considered as true and full disclosure within the meaning of section 271(1)(c) of the Act ? 3. Whether the Tribunal was right in law in holding that, except for the falsity of the explanation of the assessee, it was not established by positive evidence by the Revenue that the impugned amount was income earned by the assessee during the year under appeal and, therefore, the penalty under section 271(1)(c) of the Act cannot be sustained ?" The assessee is an individual. The assessment year involved is 1969-70. Return of income for the year was filed on December 29, 1969, declaring total income of Rs. 5,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n quoted in extenso in the order of the Tribunal. This letter clearly shows three things, viz., (1) The assessee asserted that all his claims regarding puzzle prize money and the chandla received at the time of the marriage were correct. (2) He also asserted that the prize money received by his brother was correct. However, it was only in order to buy peace that he was agreeing to be assessed on the aforesaid amounts and (3) The settlement should not be considered as an admission or confession in the prosecution or penalty proceedings which had to be considered on the basis of evidence and merits. The question that arose before the Tribunal was whether, in a case like the one before it, the penal provisions of section 271(1)(c) read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee of certain claims which are found false in Part IV of his return would not exonerate him from the penal provisions of section 271(1)(c). Part IV was meant for the purpose of disclosing income which the assessee considered to be exempt from income-tax under certain provisions of law but was not sure about it. If, eventually, it was held that the amount claimed as exempt was taxable and not exempt, the assessee might escape penalty. In the present case, the assessee disclosed that income shown in Part IV was from certain specific sources. The Department had proved that the assessee's claim that he had received income from those sources was not correct. Therefore, the assessee's claim was false and the case clearly fell within section 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can get the benefit of showing income in Part IV only when the claim for exemption is on legal grounds. Disclosure can include such items of income also about which the assessee may not have sufficient evidence to prove that such income is exempt and, therefore, desires to place it before the Income-tax Officer for such view as he might take in the circumstances. Having shown the amounts in Part IV of the return, which appears before verification, it is difficult to say that the assessee had not disclosed the particulars of income. Moreover, both the order of assessment as well as the order of the Inspecting Assistant Commissioner imposing penalty are prior to the date on which the settlement was arrived at. In the circumstances, the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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