TMI Blog1979 (11) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961 ? " The brief relevant facts are that the assessee is an " individual ". The assessment year in this case is 1969-70. During the relevant previous year the assessee's wife and minor sons received interest amounting to Rs. 6,449 from the firm in which the assessee was a partner which fell for assessment for the said assessment year 1969-70. The said sum of Rs. 6,449 was assessed in his hands in terms of s. 64 of the Income-tax Act, 1961 (hereinafter referred to as " the Act " ). A sum of Rs. 3,500 on account of low drawings for meeting his expenditure plus a further sum of Rs. 4,660 on account of unexplained investment in house construction were also added to his income. The latter two amounts were added as " income from other sources ". On making these additions, the returned income fell short of 80% of the income finally assessed and consequently proceedings for levy of penalty under s. 271(1)(c) of the Act were initiated against him. Before the IAC of Income-tax, the authority competent to levy penalty in such cases, the assessee submitted that no penalty was leviable on him because there was no concealment of income by him ; neither of the income ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act is assessable in the assessee's hands, it is incumbent on the assessee to show such income in his return. In support of this proposition, reference has been made to s. 139(1) of the Act and the argument is that the return of income of any other person for which the assessee is assessable under this Act was required to be filed by him and this supported his contention that income assessable in his hands under s. 64 of the Act must be returned by the assessee. In the instant case, it was submitted that the interest income, arising to his wife and minor sons from the firm of which the assessee was a partner, was clearly assessable in the assessee's hands. It was, therefore, his obligation under the said provision of the Act to return such income in his return of income. Since the assessee had failed to do so, the penal provisions of s. 271(1)(c) of the Act were attracted. The further submission is that the Tribunal was oblivious of the applicability of the Explanation to s. 271(1)(c) of the Act to the case, because had it not been so, the Tribunal would not have brushed aside the further additions made to the assessee's income as arising out of other sources, as being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, not acceptable. Reading s. 139 of the Act, it clearly envisages that the assessee is to submit a return of his total income or to submit the return of total income of someone whom he represents. It does not call upon the assessee to include in his total income even such income as are assessable in his hands in terms of certain provisions of the Act. Learned counsel for the department has made reference to the form of return prescribed under the Rules which was applicable to the assessment year in question. The form which he has shown to me shows a column meant for indicating the income arising to spouse or minor children. But this form came into effect from the 1st of July, 1972. The assessment year in question being 1969-70 this could not be the relevant form. I have also been referred to the statement of facts as made by the CIT in para. 4 of which he has stated : " the non-inclusion of income of wife and minor children under section 64 of the I.T. Act, 1961, does attract the provisions of section 271(1)(c) because it has been specifically provided in return Form No. 2 relevant for the assessment year 1969-70 that ' if the income of other persons is includible in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, be held that the Tribunal was right in holding that no obligation was cast on the assessee to include in his return of income, the income arising to his wife and minor sons which were includible in his income in terms of s. 64 of the Act. The failure of the assessee to do so does not attract the penal provisions of s. 271(1)(c) of the Act against him. Question No. 1 has, therefore, to be answered in the affirmative and in favour of the assessee. Coming to question No. 2, it is true that the terms of the Explanation to s. 271(1)(c) of the Act get attracted when the Income returned fell short of 80% of the income assessed and then the onus lies upon the assessee to prove that there was no concealment on his part of any income. But this does not mean that the department has got nothing to do after having once found the disparity between the income returned and the income assessed to be above 80%. That is not what the Explanation means. In the instant case, admittedly, the amount of income added as " income from other sources " were by mere estimate. The assesses denied having earned any such income and further said that the estimate was faulty ; or at least it could not gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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