- (1.) THE applicant assessee has been assessed as an individual in the year 1977-78. A question arose as to whether the amount of interest credited to the account of her minor sons in the firms, Chandra Mukhi Onkar Nath and Lala Kashi Nath Seth, ought to be included in the income of the applicant under Section 64(1)(iii) of the Income-tax Act, 1961. THE point was decided against the assessee. On her application, however, the Tribunal has referred to this court the following question of law : "Whether, on the facts and circumstances of the case, the amounts of interest credited to the accounts of the minor sons of the assessee in the firms, namely, Chandra Mukhi Onkar Nath and Lala Kashi Nath Seth, were rightly included in the income of the assessee under Section 64(1)(iii) of the Income-tax Act, 1961 ?"
(2.) THIS is Income-tax Reference No. 350 of 1982. Since the applicant had not shown the amount of interest credited to the accounts of her minor sons in her return, proceedings for imposition of penalty were initiated against her and the order passed directing penalty to be imposed, has been affirmed by the Income-tax Appellate Tribunal. An application was made before the Income-tax Appellate Tribunal in the penalty proceedings with a prayer that the following question of law may be referred to this court for its opinion : "Whether, on the facts and circumstances of the case, the Tribunal was legally justified in upholding the imposition of penalty under Section 271 (1)(c) for on-disclosure of interest income of the minor children in the assessee's total income the inclusion of which had been contested by the assessee ?" The aforesaid application was, however, dismissed by the Tribunal. Aggrieved, the applicant has made this application under Section 256(2) of the Income-tax Act with a prayer that the Tribunal may be directed to refer the aforesaid question to this court for its opinion.
(3.) HAVING heard, learned counsel for the parties, we are of the opinion that in the circumstance that the Tribunal has already referred to this court in the assessment proceedings the question whether the amount of interest credited to the accounts of the minor sons of the assessee was rightly included in the income of the assessee, the Tribunal ought to have referred the aforesaid question also to this court for its opinion in the penalty proceedings because more or less it was in the nature of a consequential question. In the result, this application succeeds and is allowed and the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, is directed to draw up a statement of the case and refer the aforesaid question arising out of the penalty proceedings to this court for its opinion. The applicant shall be entitled to her costs assessed at Rs. 125.;