TMI Blog1973 (12) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... the so-called admission, there is no material to hold that the income was concealed - Question answered in the affirmative - - - - - Dated:- 12-12-1973 - Judge(s) : P. GOVINDAN NAIR., K. SADASIVAN. JUDGMENT The judgment of the court was delivered by SADASIVAN J.-The Income-tax Appellate Tribunal, Cochin Bench, has referred the following question, viz. : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in cancelling the penalties levied under section 271(1)(c) of the Income-tax Act, 1961, for the assessment years 1963-64, 1964-65 and 1965-66 ? " The assessee runs an aeronautical engineering college under the name " Southern College of Engineering and Technology " at Chalaku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 3,000 for 1964-65 and Rs. 1,500 for 1965-66, respectively, holding that the assessee had concealed income for those years. The assessee appealed to the Tribunal. Before the Tribunal the assessee contended that the income was entitled to exemption under section 10(22) of the Income-tax Act, 1961, and that, in any event, the balance of deposits remaining unreturned was not income in her hands liable to be taxed. The first of these contentions was not, however, pressed before the Tribunal. Expatiating on the second contention, it was argued by the assessee that she was in the position of a trustee of the students from whom the money had been collected, and as such money in her hands is not liable to be treated as income. To subvert this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quality about it when received. It remains money received by a solicitor as 'client's money' for being employed in the client's cause. The solicitor remains liable to account for this money to his client. The fact that the money was paid to the solicitor by a client will not make any difference, if initially the money was not received as trade receipt. " (Commissioner of Income-tax v. Sandersons and Morgans). Similar is the position in the present case. Here also, the money received has no profit-making quality about it, and it continues to be the money of the students for which the assessee is accountable to the students. The assessee all along has been in the bona fide belief that the surplus amount in her hands under the above account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner refused to give such opportunity and levied penalty. The appeals filed by the assessee were dismissed by the Appellate Tribunal. On a reference, it was held : " Even treating the surrender as an admission of the concealment of undisclosed income, the Inspecting Assistant Commissioner could not deny the assessee its right to prove that the fact of surrender was no such admission and that the so-called admission was in fact wrong and the surrender was made solely to avoid botheration as stated by the assessee. Penalty proceedings are distinct from the assessment proceedings and are in the nature of quasi-criminal proceedings. The onus was on the department to positively prove and produce for that purpose certain other material besides ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
