Punjab-Haryana High Court
Commissioner Of Income-Tax vs Shant Sports Industries on 24 August, 1995
Equivalent citations: [1996]217ITR243(P&H)
Author: R.P. Sethi
Bench: R.P. Sethi
JUDGMENT
1. The prayer of the petitioner for making a reference under Section 256(1) of the Income-tax Act, 1961, was rejected by the Income-tax Tribunal, vide its order dated March 19, 1992, mainly on the ground that the question of law involved does not require reference. On the facts, the Tribunal had held :
"Keeping in view the totality of facts and circumstances of the case, we are satisfied that non-disclosure of the amount of Rs. 88,408 by the assessee in the closing stock, when he filed the original return, was due to a bona fide mistake, which was detected by the assessee during the course of assessment proceedings although on prodding by the Assessing Officer and which mistake was rectified by filing a revised return and, as such, the assessee cannot be held guilty of concealment of income particularly so because the tax payable by the assessee-firm and its partners was much more than the tax which was finally held to be payable on the basis of revised returns by the assessee and its partners."
2. The question of bona fide mistake could not, therefore, be termed to be a question of law requiring reference to this court for adjudication under the provisions of Section 256 of the Income-tax Act.
3. Learned counsel for the petitioner has relied upon Addl. CIT v. Chandravilas Hotel [1978] 115 ITR 118 (SC) to urge that as the finding arrived at by the Tribunal was without considering the entire material on record, the question of law arose which required reference to this court. The facts of the present case are distinguishable as in the present case, the Tribunal has arrived at the finding of bona fide mistake upon a consideration of the entire material on record. In its order passed in the appeal of the assessee, the Appellate Tribunal considered all the aspects of the matter and concluded :
"In the context of the above law, it is clear that the explanation given by the assessee for non-inclusion of the amount of Rs. 88,408 in the closing stock is bona fide which is also proved from the fact that the Department has allowed deduction of Rs. 88,408 while framing the assessment for the assessment year 1984-85. The assessee disclosed all the facts relating to the understatement of the closing stock in the original return filed by filing a revised return on January 25, 1985, along with a revised statement of accounts much before the finalisation of the assessment. In fact, penalty proceedings were initiated by the Assessing Officer under Section 271(1)(c) subsequent to the disclosure made by the assessee, though on a prodding by the Assessing Officer. The disclosure of information, thus, preceded the formation of satisfaction by the Assessing Officer rather than following it. The explanation given by the assessee is bona fide and there is total absence of any intent to deceive because the total tax paid by the assessee and its partners on the basis of the original return for the assessment years 1983-84 and 1984-85 was more than the total tax paid by the assessee and its partners on the basis of the revised return for the assessment years 1983-84 and 1984-85 as per the factual information given by the assessee and as reproduced in paragraph 3.6 above.
8. Keeping in view the totality of facts and circumstances of the case, we are satisfied that non-disclosure of the amount of Rs. 88,408 by the assessee in the closing stock, when he filed the original return, was due to a bona fide mistake, which was detected by the assessee during the course of assessment proceedings although on prodding by the Assessing Officer and which mistake was rectified by filing a revised return and as such the assessee cannot be held guilty of concealment of income particularly so because the tax payable by the assessee-firm and its partners was much more than the tax which was finally held to be payable on the basis of the revised returns by the assessee and its partners. "
4. The reliance of learned counsel for the petitioner on CIT v. Suraj Bhan, Wine Contractor [1989] 177 ITR 243 (P & H) is also misplaced inasmuch as in that case the judgment was announced in the absence of the assessee and the court, under the circumstances of the case, came to the conclusion that the question raised by the Revenue was a question of law requiring reference to this court.
5. This court in Income-tax Case No. 146 of 1992 (CIT v. Shadi Lal Puri [1995] 214 ITR 552) decided on January 9, 1995, indicated the circumstances under which reference can be directed to be made to this court. Applying the tests laid down in Shadi Lal Puri's case [1995] 214 ITR 552 (P & H), no case is made out for issuance of a direction to the Tribunal to make a reference to this court under Sub-section (2) of Section 256 of the Act.
6. No merit. Dismissed.