COMMISSIONER OF INCOME TAX Vs. LAL BABU

JUDGEMENT

(1.) THE Patna Bench of the Income-tax Appellate Tribunal has referred the undermentioned questions of law for opinion to this court :

(2.) THE brief relevant facts are that the assessee is an " individual''. THE assessment year in this case is 1969-70. During the relevant previous year the assessee's wife and minor sons received interest amounting to Rs. 6,449 from the firm in which the assessee was a partner which fell for assessment for the said assessment year 1969-70. THE said sum of Rs. 6,449 was assessed in his hands in terms of Section 64 of the Income-tax Act, 1961 (hereinafter referred to as " the Act "). A sum of Rs. 3,500 on account of low drawings for meeting his expenditure plus a further sum of Rs. 4,660 on account of unexplained investment in house construction were also added to his income. THE latter two amounts were added as " income from other sources ". On making these additions, the returned income fell short of 80% of the income finally assessed and consequently proceedings for levy of penalty under Section 271(1)(c) of the Act were initiated against him.

(3.) LEARNED counsel for the department submitted that it was obligatory on the part of the assessee to show in his return the income which was assessable in his hands in terms of Section 64 of the Act. In this connection, reference was made to the form of income-tax return in which a column had been provided for disclosing such income. It was further submitted that by virtue of the fact that the income arising under Section 64 of the Act is assessable in the assessee's hands, it is incumbent on the assessee to show such income in his return. In support of this proposition, reference has been made to Section 139(1) of the Act and the argument is that the return of income of any other person for which the assessee is assessable under this Act was required to be filed by him and this supported his contention that income assessable in his hands under Section 64 of the Act must be returned by the assessee.