TMI Blog1975 (7) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... arkash, the two partners of the firm, equally. It was not entered in the return of income of the firm or the two partners. The reason stated by the assessees was that the refund related to the earlier period when the firm was constituted differently and that it was not the income of the present firm. The Income-tax Officer, however, treated it as "deemed income" under section 41(1) of the Income-tax Act, 1961 (hereinafter referred to as "the 1961 Act"), and added the same in computing the total income of the firm. On appeal, the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer. Further appeal to the Income-tax Tribunal was dismissed. The Inspecting Assistant Commissioner levied penalties on all the assessees un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 28 or section 41 or section 59 ; ... " 271. (1) if the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person--... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,--...... (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished." Section 4 is a charging section and says that income-tax shall be charged for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent any difficulty as the word "income" has been defined in the Act and it includes income under section 41. A reading of sections 4 and further shows that the "deemed income" under section 41 shall be liable to tax under section 4, as such an income will be as good an income as income from any other source mentioned in the definition clause. According to section 271, the concealment of income or furnishing of inaccurate particulars regarding any income would entitle the Income-tax Officer and the Appellate Assistant Commissioner to impose penalty. Therefore, if income under section 41 is concealed, the provisions of section 271 are attracted provided other conditions in that section are fulfilled. The officers concerned have, however, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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