9911796707
TMI Blog1987 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the assessee that it did not appeal because it wanted to keep good relations with the Revenue although, according to the assessee, the above additions made by the Income-tax Officer were totally unjustified and illegal. On March 14, 1963, the Income-tax Officer issued notice under section 274 read with section 271 of the Income-tax Act, 1961 (hereinafter called " the Act "), in respect of the assessment year 1958-59 for imposing penalty. The assessee-company demurred. After considering the reply, the Inspecting Assistant Commissioner on October 1, 1964, imposed a penalty of Rs. 70,000 under section 274 read with section 271 of the Act holding, inter alia, that there was concealment of income to the tune of Rs. 1,37,700 and the maximum penalty of Rs. 1,06,317 was imposable in law but a sum of Rs. 70,000 was imposed as penalty considering the facts and circumstances of the case, The assessee preferred an appeal against the said order. The, Tribunal, after considering the entire matter, reduced the penalty to Rs. 5,000. The Tribunal referred the following three questions, two at the instance of the assessee and one at the instance of the Revenue; to the High Court for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which this penalty proceeding arose, noted that there were several disallowances in various accounts and he mentioned altogether 19 items totalling Rs. 3,01,787. All these were on account of disallowances. Main item was shortage in cane and the amount was Rs. 67,500. Another item was salary of outstation staff and the amount was Rs. 21,700. There was also addition of Rs. 48,500 on account of inflation in the price of sugarcane. The Inspecting Assistant Commissioner in his order noted, inter alia, three items, namely, (i) inflation in price of sugarcane Rs. 48,500; (ii) excess shortage claimed in cane Rs. 67,500 ; and (iii) salary of outstation staff of loading contractors Rs. 21,700. It was found so far as the last item was concerned that the amount was disallowed being a false debit. It was found that the assessee attempted to understate the income by debiting a false expenditure of Rs. 48,500. The Inspecting Assistant Commissioner noted that the actual shortage was 21,143 Mds. valued at Rs. 26,429 while the assessee had claimed Rs. 1,34,661 for shortage at 2%. The excess claim was also indicative of the real position that the shortage was fictitiously claimed at a high figur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee agreed to the additions of the amounts in the assessment. So far as the reliance placed upon Kanodia's statement by the Inspecting Assistant Commissioner was concerned, it had no relevance or bearing to the facts of the assessment year in question. He was not the contractor employed by the assessee in the year of account. He came in only a later year. One Avinash Chand was the contractor in the year in question. He had specifically stated that be was responsible for shortages. He had also admitted that there was staff maintained by the mill at the centre at which he was the loading contractor. In fact, he had gone to the extent of stating as to what staff was maintained in that centre; there was a man in charge of the centre, a weighment clerk, a cane clerk and three to four chowkidars. He had also stated that they were not his employees. According to the Tribunal, in these circumstances, the assessee could very well have argued against the addition of the two sums, namely, Rs. 67,500 and Rs. 21,700. But the assessee, as we have noted, had agreed to the amounts being included. The Tribunal was of the view that the mere fact that the amounts were agreed to be taken into ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion. The High Court was of the view that the Tribunal was in error in brushing aside consideration of these aspects while considering the question of concealment. In respect of the addition of Rs. 21,700, the Inspecting Assistant Commissioner had relied upon the statement of Kedar Nath Kanodia as also the fact that the assessee admitted that this item represented its income. The Tribunal did not place reliance upon the statement of Kedar Nath Kanodia. It, however, omitted to take into account the fact that the assessee had admitted that these items represented its income. The High Court was of the view that such admissions were made by the assessee but the Tribunal had not properly appreciated that aspect. Therefore, in respect of these two items, the High Court was of the view that the Tribunal was not right in holding that the assessee was not guilty of any concealment. So far as question No. 2 was concerned which dealt with Rs. 48,500, the High Court confined itself to the disallowance in respect of purchase of cane. In so far as this question was answered in favour of the assessee and there is no challenge by the Revenue, it is not material any more. The High Court came to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmination of the issue equally with the finding or ascertainment of the basic facts did not involve the application of any principle of law, an inference from the facts could not be regarded as one of law. The proposition that an inference from facts was one of law was, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact. In the case of pure questions of fact, an inference from the facts was as much a question of fact as the evidence of the facts. In the instant case, there is a finding of fact and unless it could be said that all the relevant facts had not been considered in a proper light, no question of law arises. In our opinion, the Tribunal took into account all the relevant facts. The Tribunal had been accused by the High Court of not taking into consideration the fact that the assessee had admitted these amounts in the assessment. To admit that there has been excess claim or disallowance is not the same thing as deliberate concealment or furnishing inaccurate particulars. At least in the background of the law as it stood at the relevant time, that was the position. There have been some changes subsequently which we hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to act judicially, i.e., to consider all the evidence in favour of and against the, assessee. An order recorded on a review of only a part of the evidence and ignoring the remaining evidence could not be regarded as conclusively determinative of the question of fact raised before the Tribunal. It is for the income-tax authority to prove that a particular receipt is taxable if, however, the receipt is accepted and a certain amount is accepted as taxable, it could be added but it was not accepted by the assessee, however, that it had deliberately furnished inaccurate particulars or concealed any income. In our opinion, the Tribunal has properly considered all the evidence in the instant case. In Rameshwar Prasad Bagla v. CIT [1973] 87 ITR 421, this court again reiterated that it was for the Tribunal to decide questions of fact, and the High Court in a reference under section 66 of the Act, as at that time, could not go behind the Tribunal's findings of fact. The High Court could only lay down the law applicable to the facts found by the Tribunal. The High Court in a reference under section 66 of the Act, as at that time, could, however, go into the question as to whether the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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