Delhi High Court
Tube Fabrico (I.) Ltd. vs Commissioner Of Income-Tax on 4 October, 1993
Equivalent citations: [1994]210ITR1035(DELHI)
Author: B.N. Kirpal
Bench: B.N. Kirpal
JUDGMENT
1. This order will dispose of the applications under section 256(2) of the Income-tax Act, 1961, in respect of the assessment years 1974-75 to 1978-79.
2. The assessed is a firm which was carrying on business in the purchase and sale of steel tubes. On April 7, 1980, there was a search under section 132(1) of the Act at the business and residential premises of the assessed-firm and its partners. One of the items which got known as result of the search was that in the financial year 1977-78 relevant to the assessment year 1978-79, the assessed-firm had sold steel tubes worth Rs. 2,82,000 to one Messrs. B. R. Industries, which was the personal business of one Mr. B. R. Gupta, who was the partner of the assessed-firm.
3. This information was available from the books of Messrs. B. R. Industries when the premises of Mr. B. R. Gupta were searched and the corresponding entry was not available from the books of the assessed-firm because, according to the assessed, the books had been taken away by the accountant of the firm. What interest the accountant of the firm had in taken away the books of the firm, we would not like to comment upon but that is the story which the assessed put forth before the Income-tax Department for whatever it was worth.
4. According to the assessed, it wanted to buy peace and it offered to get itself assessed on the sum of Rs. 2,25,010 but instead of being taxed in the previous year relevant to the assessment year 1978-79, it wanted that it should be spread over the years 1974-75 to 1978-79. Revised returns were filed by the assessed for each of the years, namely, 1974-75, 1975-76, 1976-77 and it surrendered Rs. 47,000 in each year in respect of the assessment year 1977-78 the surrendered amount was Rs. 39,665 and in respect of the assessment year 1978-79, there was an addition of Rs. 54,345 to the trading account and that the was not challenged in appeal by the assessed as it withdrew the appeal.
5. The Income-tax Officer levied penalty in respect of each of these years under section 271(1)(c) of the Act. The assessed was successful in the appeal before the Commissioner of Income-tax (Appeals) but the Tribunal came to the conclusion that the provisions of section 271(1)(c) applied and the penalty was rightly levied. However, applications under section 256(1) of the Income-tax Act have been dismissed. The present applications have been filed wherein the assessed seeks reference of questions relating to the imposition of penalty under section 271(1)(c).
6. It is contended by learned counsel for the assessed that no penalty was leviable as it was by reason of the agreement between the assessed and the Department that the sum of Rs. 2,25,010 was spread over five different assessment years.
7. In our opinion, on question of law arises. It is a finding of fact that there was concealed income to the extent of Rs. 2,25,010. It could have been taxed in the year in which it was fond, namely, in the previous year relevant to the assessment year 1978-79. It was at the instance of the assessed that the Department agreed to a spread over of this sum over a number of years presumably for the contention that the sum of Rs. 2,25,010 may have been earned in different years. Be that as it may, merely because the assessed's contention for spreading over the said addition over a number of years had been accepted, this cannot be a reason for concluding that the assessed was not guilty of concealing its income. The very fact that the assessed filed revised returns is an admission on the part of the assessed of concealment of income. The assessed cannot plead an agreement because there can be no agreement or estoppel against a statute. When the statute itself casts a liability on an assessed, on agreement with the Income-tax Department can entitled an assessed to avoid that liability. Once the assessment has been made in respect of each of these years by giving effect to the spread over, the only implication in law clearly is that in each of these years, there was concealment of income and the Tribunal having decided the question of fact that the total amount concealed was Rs. 2,25,010 which was spread over, no question of law, in our opinion, arises. Dismissed.