AJIT SINGH BAINS,J. - (1.) THE facts giving rise to this reference are as follows: The assessee is an individual and for the assessment year 1961-62 (previous year commencing on 1st of April, 1960, and ending on 31st of March, 1961), he filed his return of income showing a total income of Rs. 86,029. The assessee had withdrawn Rs. 2,000 on account of household expenses and the amount was debited to his account at the end of the year as per his account books. The Income-tax Officer did not accept the statement of the assessee that his household expenses during the accounting year commencing on 1st April, 1960, and ending on 31st March, 1961, amounted to only Rs. 2,000. The Income-tax Officer estimated that the household expenses of the assessee must have been at the rate of Rs. 500 per month and at that rate he must have spent Rs. 6,000 during the accounting year. Thus, the difference of Rs. 4,000 was added in his income for the purpose of assessment. This addition was confirmed by the Appellate Assistant Commissioner and also by the Tribunal on appeal. The penalty proceedings were initiated at the time of completing the assessment and as the minimum penalty exceeded Rs. 1,000, the matter was referred to the Inspecting Assistant Commissioner who imposed a penalty of Rs. 6,061 under Section 271 (1) (c) read with Section 274 (2) of the Income-tax Act, 1961 (hereinafter called "the Act"), vide his order dated January 17, 1968. Aggrieved by the order of the Inspecting Assistant Commissioner, the assessee filed appeal before the Tribunal against the penalty. The Tribunal rejected the appeal, vide its order dated 22nd April, 1971. Thereafter, two applications were moved under Section 254 (2) of the Act for rectification of the order of the Tribunal but the game were dismissed by the Tribunal, vide order dated 4th April, 1972.
(2.) THE assessee then moved an application under Section 256 (1) of the Act requiring the Tribunal to refer to the High Court three questions of law, enumerated therein, arising out of its order. This application was also dismissed by the Tribunal by its order dated 4th April, 1972. The assessee then moved the High Court under Section 256 (2) of the Act which was allowed and the department was directed to state the case and refer the following question of law for opinion by the High Court: "whether, there was any evidence for the Tribunal to come to the conclusion that the assessee had concealed the particulars of income or deliberately furnished inaccurate particulars for imposition of a penalty under Section 271 (l) (c) of the Income-tax Act, 1961 ?" Mr. Arora, the learned counsel for the petitioner, contended that there was no evidence before the Tribunal to come to the conclusion that the assessee had concealed the particulars of income or deliberately furnished inaccurate particulars. This contention of Mr. Arora is devoid of merit and cannot be accepted. It will be observed that there was sufficient evidence before the Tribunal for coming to this conclusion and imposing the penalty. The assessee was the managing director of Oswal Woollen Mills Ltd. , Ludhiana, during the previous year relevant to the assessment year under reference. He derived income from property, dividends, interest and shares from various firms. It is unbelievable and does not stand to reason that the assessee would incur Rs. 2,000 only on his household which, too, he withdrew at the end of the year. Admittedly, Oswal Woollen Mills Ltd. , Ludhiana, is the leading industry of Ludhiana. The Income-tax Officer and the Tribunal had rightly found that the withdrawal for household expenses was totally inadequate and that the assessee had spent money out of his undisclosed resources. The plea of the assessee that he had received Rs. 1,000 from Smt. Mohan Devi which was utilised for household expenses was proved to be false as the wealth-tax record of the lady revealed that the amount in question had been utilised by her for the purchase of jewellery. The family of the assessee consisted of himself, his wife, four sons and one daughter. Two sons and one daughter were of school going ages. None of the family members bore any of the household expenses though he or she was earning separately. The Tribunal, therefore, rightly observed : "it is absurd to think that a man having substantial income from year to year and having income of Rs. 86,000 according to his own return during the previous year under consideration could manage his household expenses on a petty sum of Rs. 2,000 only. The addition of Rs. 4,000 if at all has been on the low side. "
(3.) IN this view of the matter we hold that there was ample evidence before the Tribunal to come to the conclusion that the assessee had concealed his income or deliberately furnished inaccurate particulars of his income.;