1982 (8) TMI 43 - HC - Income Tax

Summary

Issues involved: Assessment of penalty u/s 41(1) of the Income-tax Act, 1961 for alleged concealment of income by an assessee-firm during different assessment years.

Summary:
The High Court of Punjab and Haryana addressed the issue of penalty imposition on an assessee-firm for alleged concealment of income during various assessment years. The firm underwent multiple changes in its constitution, with different partners being introduced over time. The penalty was initially imposed by the Inspecting Assistant Commissioner (IAC) as a protective measure due to a similar penalty imposed on two partners for concealing income. However, the Tribunal found that while protective assessment orders could be passed, the same did not apply to penalties. The Tribunal also noted the absence of any finding by the IAC regarding wilful concealment of income, making the penalty order unsustainable. Furthermore, the income in question was not credited to the firm's account but to the individual partners' accounts from the earlier firm, indicating a different entity receiving the refund. Consequently, the Tribunal rightfully deleted the penalty, leading to questions 1 and 3 being answered in favor of the assessee. As a result, the High Court did not address question 2 and returned it unanswered. No costs were awarded in this matter.