- (1.) HEARD .
(2.) LEARNED Counsel for the appellant. The following substantial question is framed at the time of admission: Whether, on the facts and circumstances of the case, the Tribunal committed error of law by not drawing presumption under Section 271(1)(c) Explanation 5 of the Income -tax Act, that the assessee firm concealed the income by not mentioning in the return of the relevant year. The facts of proceedings as appear from the order passed by the Tribunal and on the basis of material made available to us by learned Counsel for the parties are that the assessee, Sh. Madanlal has two status under the Income -tax Act, 1961. He is being assessed to income -tax as individual in the name of Sh. Madanlal and total estimated tax liability for assessment years 1987 -88 and 1988 -89 was computed for the purpose of retaining assets found during the search. The order shows that Rs. 4 lakhs were included in the income of the assessment year 1987 -88 and Rs. 3 lakhs for the assessment year 1988 -89. The firm of which Madanlal is a partner is assessed as a registered firm in the name of M/s. Madanlal Gaggar. The present appeal relates to proceedings for levy of penalty on the firm M/s. Madanlal Gaggar. A search was conducted at the premises of Sh. Madanlal, between October 14, 1987 and October 17, 1987. This search was carried out under a warrant issued under Section 132(1) in the name of Sh. Madan Lal. Simultaneous search was conducted on the business premises of the assessee. Order in terms of Section 132(5) of the Income -tax Act, 1961, were also made in the name of Sh. Madanlal only in his status as individual. In the order under Section 132(5) it was noticed that no separate addition is being made in the case of the firm since the assessee has voluntarily offered in his statement recorded under Section 132(5) the amount of Rs. 7 lakhs as income from undisclosed sources to be spread over in two different years i.e., the assessment years 1987 -88 and 1988 -89.
(3.) THE assessee -firm has filed a return initially for the assessment year 1987 -88 on August 13, 1987, and declared total income of Rs. 47,671 and the assessment was also completed under Section 143(1) on the returned income on March 31,1987. However, later on this return for 1987 -88 filed on February 9, 1990, in pursuance of notice under Section 148 issued on February 6, 1990. The assessee showed income of Rs. 4,46,761 instead of Rs. 46,761 as per the original return and claimed loss of Rs. 1 lakh in mining business. However, the Assessing Officer disallowed the claim of loss and assessed the firm at Rs. 4,47,761. In his individual capacity including remainder Rs. 3 lakhs as his income. The amount of Rs. 3 lakhs surrendered by the assessee Sh. Madanlal out of Rs. 7 lakhs as noticed order under Section 132(5) was assessed in the status as individual and this has become final.;