- (1.) The facts in these four appeals are substantially common. We will deal with the facts in respect of only one appeal (Civil No. 631 of 1967) relating to the assessment of income-tax for the assessment year 1943-44. The decision will govern the other appeals.
(2.) The assessee declared in his return for the assessment year 1943-44, an income of Rs. 34,560. 00. On examination of the accounts produced by the assessee the Income Tax Officer found that there was inflation in purchase, spurious cash credit, diversion of sales, and bogus speculation losses were claimed. In assessing the income the Income Tax Officer made additions under four heads of different items of income and brought to tax an income of Rs. 1,43,433. 00. The order: passed by the Income Tax Officer was substantially confirmed in appeal by the Appellate Assistant Commissioner and by the tribunal. The Income Tax Officer also commenced a proceeding under S. 28 (1) (c) of the Indian Income Tax Act and imposed a penalty of Rs. 24,500. 00 upon the assessee. Against the order passed in proceedings for levying penalty, appeals were taken to the Appellate Assistant Commissioner who confirmed the order passed by the Income Tax Officer. The Income Tax Appellate tribunal was of the view that there was concealment only in respect of cash credits and in suppressing sales in the partners' accounts and reduced the penalty to Rs. 2,000. 00 only. The Commissioner of Income Tax then applied under S. 66 (1) of the Act for referring the following question: "Whether on the facts and in the circumstances of the case, and on true appreciation of the material on record, was the Appellate tribunal justified in coming to the conclusion that the Department did not prove concealment 'of income in respect of the following additions, viz. , (1) inflation of purchases-transaction in the name of K. Venkataseshiah Chetty Rs. 21,500. 00, (2) speculation' losses in the names of seven persons Rs. 26,789. 00. "the tribunal declined to make a reference holding that no question of law arose out of its order. An application under S. 66 (2) of the Act calling for a statement of case from the tribunal on the same question filed before the High court also did not succeed. With special leave this appeal has been preferred.
(3.) In our judgment the question raised was purely one of fact. On the materials and in the circumstances of the case if the tribunal reached the conclusion that it did, that there was no suppression of sales on the facts disclosed, no case could be referred to the High court under S. 66 (1) seeking to upset that conclusion. We do not think that any question of law arose which would justify the tribunal in making a reference under S. 66 (1) to the High court for calling for a statement of case from the tribunal on that question.;