1960 (11) TMI 20 - SC - Income Tax

Whether after the dissolution of the firm by the death of M. P. Thomas in October, 1949, no order imposing a penalty could be passed against the firm?

Held that:- the petition filed by the appellant should not have been entertained. The Income-tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in respect of any improper orders passed by the income-tax authorities, and the appellant could not be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Tribunal.

On the merits, the appellant is not entitled to relief. The Income-tax Officer found that the appellant had with a view to evade payment of tax, deliberately concealed material particulars of his income. Even though the firm was carrying on transactions in food grains in diverse names, no entries, in respect of those transactions in the books of account were posted and false credit entries of loans alleged to have been borrowed from several persons were made. The conditions prescribed by section 28(1)(c) for imposing penalty were, therefore, fulfilled. Appeal dismissed.