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TMI Blog1973 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... by one common judgment. Bakshi Mohd. Yusuf was a working partner in the firm, Messrs. Fairdeal Motors, Indore. While submitting his return for the assessment year 1962-63, the assessee showed a salary of Rs. 500, which he was receiving from the firm but did not show the share of profits received by him, although the particulars of the income from his share in the said firm were furnished by the assessee to the department later. It appears that the Income-tax Officer concerned issued on March 27, 1967, a notice to the assessee to show cause why an order imposing penalty be not made against him. After hearing the assessee he referred the case to the Inspecting Assistant Commissioner who levied a penalty of Rs. 3,550 on March 10, 1969. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w the share income from M/s. Fairdeal Motors, Indore, in the return so as to attract the provision of section 271(1)(c) ? (ii) Whether the procedure for the levy of penalty was legally complied with when the Inspecting Assistant Commissioner did not issue a notice under section 274 before the completion of the assessment ? " These are the facts of the case of Bakshi Mohd. Yusuf. As regards the case of the assessee, Bakshi Mohd. Shafi, the facts are similar. His case also pertains to the assessment year 1962-63. This assessee was not only a partner in the firm of M/s. Fairdeal Motors, Indore, but also in the firm of J. K. Timbers Traders, Srinagar. The assessee did not show any share of profit in any of these firms in the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to by the Tribunal in both these cases, and which is as to whether or not the assessee had deliberately furnished inaccurate particulars of his income so as to fall within the ambit of section 271(1)(c) of the Income-tax Act. Before answering the references, it may be necessary to mention a few admitted facts as adverted to by the Tribunal in its order of reference. (1) That both the assessees were partners of a particular firm or firms. (2) That in one case the assessee showed his salary but not the share of his profit in the firm, while in the other case the assessee did not show his income from the share in the firm of which he was a partner. (3) That the assessees after having filed their returns produced of accounts in the books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72, Additional Commissioner of Income-tax v. Sadiq Ali & Bros, we construed section 271(1)(c) and observed as follows : " In the instant case the assessee's conduct falls within the second part of section 271(1)(c) and not the first part, that is to say, the assessee is alleged to have deliberately furnished inaccurate particulars of his income. As the assessee had filed its income-tax return and had already shown these amounts in his books of account, it cannot be said that the assessee had concealed the particulars of its income so as to bring its case within the four corners of the first part of section 271(1)(c). Similarly, the word ' satisfied ' appearing in section 271(1) which qualifies both the clauses of section 271 is a very stro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act which replaced the old section 28, the statute had to be construed more strictly and differently. This reasoning of the Tribunal is not at all supported by the language of section 28 of the previous Act or section 271(1)(c) of the present Act. By virtue of the amendment only the numbers of the sections have been changed but the contents remain the same. Therefore, we do not see any reason why the principles enunciated by the authorities on the interpretation of section 28 of the old Act would cease to apply to section 271(1)(c) of the amended Act. It is true that the legislature did amend section 271(1)(c) specifically by dropping the word " deliberately " but that was long after the assessment of the assessees was over and the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the old Act. It is well-settled that a fiscal statute must be strictly construed to give every benefit of doubt to the subject . When, therefore, the legislature intended that no penalty should be imposed on the assessee unless his omission is deliberate, the court must carry out the object and the intention of the legislature. For these reasons we think that the reasoning given by the learned Tribunal is legally erroneous and cannot be sustained. In the instant cases, as already stated, there is hardly any circumstance which goes to prove culpable negligence or wilful omission on the part of the assessees so as to suggest that their conduct in not giving correct particulars in their returns was deliberate. The Income-tax Officer could hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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