TMI Blog1983 (7) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse was more than the admitted value of Rs. 50,000 and the Inspector of the Department was directed to inspect the house and give a valuation report. The Inspector inspected the house on January 19, 1974, and made enquiries. At that time, the assessee pointed out that he had purchased an old house in 1947 and reconstructed the same in 1956, the expenses of reconstruction having been advanced by the assessee's wife's grandfather. However, the Inspector's report revealed that the municipal authorities sanctioned the reconstruction only on December 12, 1967, and the assessee started reconstruction on April 1, 1968, and completed the same in 1970. The Inspector estimated the cost of reconstruction for the three years' period at Rs. 98,000 as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal sustained the levy of penalty of Rs. 15,000 on the ground that the value of the house had been estimated by the assessee to be Rs. 95,000, and it was also admitted by the assessee that the sum of Rs. 45,000 represented his concealed income for a period of three years. The Tribunal also held that the assessee could not escape the levy of penalty merely on the ground that the Department had not made an independent enquiry to find out whether the assessee had the requisite money or whether there was any concealment. Aggrieved by the order of the Tribunal, the assessee had sought for a direction to the Tribunal to refer the following questions: "1. Whether, on the facts and in the circumstances of the case, the Tribunal had material to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, namely, whether the levy of penalty of Rs. 15,000 for the year 1971-72 could be sustained under s. 271(1)(c) of the Act. The facts found by the Tribunal are these. At the stage of the original assessment for 1971-72, the assessee did not disclose the real value of his residential house and he valued the same only at Rs. 50,000. Subsequently, it came to light during the wealth-tax assessment that the house had been undervalued, and that the real value of the house was Rs. 95,000. The assessee himself had admitted the value of the house to be Rs. 95,000 and he stated on oath before the ITO at the stage of the reassessment proceedings that the house had been undervalued to the extent of Rs. 45,000 and that the said sum of Rs., 45,000 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make an independent enquiry to find out whether there was any suppression of income during the year in question and that the mere fact that an addition of Rs. 15,000 came to be made in the reassessment proceedings is not a ground for imposing the penalty automatically. However, we find that in this case, the imposition of penalty is not automatic. It is no doubt true that the reassessment proceedings should be taken to be independent of the penalty proceedings and the mere fact that some addition came to be made in the reassessment proceedings would not automatically be taken as ground for levying penalty. As already stated, in this case, the assessee was served with a show-cause notice in the proceedings for the levy of penalty. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing authority is entitled to rely on, the discrepancy in the statement made by the assessee and act on the admission made by the assessee at the reassessment stage. The learned counsel for the petitioner would say that notwithstanding the fact that the assessee has admitted the non-disclosure of income of Rs. 15,000 in the assessment year 1971-72, the Department has to make an independent enquiry as to whether the non-disclosure was wilful. In this case, the admitted fact is that at the stage of the original assessment, the assessee came forward with a case that the entire cost of construction had been met by his wife's grandfather and the account books of the assessee did not disclose any expenditure in relation to the reconstructi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
