LexTHE COMMISSIONER OF INCOME TAX, MADRAS AND ANOTHER versus S. V. ANGIDI CHETTIAR
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
January ,9.
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SW~J!jNE[:OP,R'l;'-RlpPOR~S·.f~Q.621 SUPP.
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THE COMMISSIONER. OF ~QPME TAXA ,-
. ,.·, '. ,!>fi\'DR~~,A~R A~O'.If.I;ER
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$.'y. ANGIDI CHETTIAR'-
(B:P.:Sf.NkA, c. J., J. L. r(Apm·'. 11:r. E:rnlvATef.c.uH,
J. C: SHAH and J. R .. MunHOLii:AR, J,J.)'
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~ Income #a)j-Penalt11 pn concealed income-'-Power lo
itliJ!Ose penally 6'n A~regislerea firm· after dissolution-0.qndition
,Jo• the ~xercise 'O.f ,.iufis{Ji'ition b11 Tncci~-tax Officer-Indian
Incp11JeJa:t'Ac~, J92Z.(Jt•cf1.922J. ss. 28,' 44.
/ A registered
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fim;i' c6ncealed Particulars of incorn! ""'bile
syb111ittin_g _its, ~etur.i.l§ fordbb'i v.ars 1947-48,
1949-50 and
/9oq-s~, .. The, .1 Irlpolije-t'!I'.
,Offi~er imposed
penalty under
s.2\l. (l) of the Indian Income-tax Act,
19?2. • Tlie High
Court was moved for a Wtit of certiofari, subllJ.i;ting that the
Incqme-tax Qfficenc;ould hot impose jjehalty under ,the said
S':,ctioQ,as he ~&9. in(o1mation that ,.the .registered
firm was
?issolv!'d ·an Awjl j3 .• l?~.l. hY. ?l:r~~m~nt,,;ind in any event
on M"av·5, 19S3, by theJl.e~•h, of on.e pf,tl\e., partners. The
Higll Cb'lfrt issued tlit \\Ii-ft '!i.nd' qtashecf the order imposing
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pena ty.
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He(d;tthat the.ptin'ciple lfaid llof>t in ·o. A. Abraha"if
case [196li ~. S.-C. ,&, 7J5,5, 1 i• as'rlluch'app1icable to a register-
ed ~irl!l a~. ~o an unrrgistei;ed fjrm., , Thor~ is -.nothing in s.4{
of th
1e 1Act "or the context jn \\1 hich...it..-~occurs
to jndicate· that
it does not apply to regi~'tercd firm.
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Held, further'; ·thit lhe 'pe~a'iiy provision;' u~cl~r s. ~8
would ij\ the"evsn;.of t~e default cbotemplated br els. (_a)
(b) or (c) be applicable 1n the course of assessment of a reins-
tered firm.
If tlie registf'rerl firm
is exposed to liability
of paying penalty because ~t ha1t commiltrd any of the defa-
ults contemplated hy els. (a), lb) or \c) by
virtue of s.44 the
asse~sn1ent proceedings are liable to be
continued against the
rf'gistered firm evcrn after Ji·.-.sulution as if it has r.ot been
dissolved ..
The power to impose pena!ty under. s. ¥8 depends upon
the satiifaction of the IncoJie.tax Off1crr in the course nf
proceedi~gs under the i~ct.
It cannot le exercised if he is
not sathfied about the existence of CAnditions specified in cl.
(a), (b) or (c) Lefore the
proccedin~s arc concluded. The
procc~dings f'1r levy of penalty has, ,ho\vever1 not to be con1-
1nenced by the Incorne-tax Offi~er, befo1c complr.tion of the
asseSSII}ent proc:eedings by hini.
Sa~isfaction before the con-
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2 S.C.R.
SUPREME COURT REPORTS
641
clusion of the proceeding under the Act and not the issue of
notice of intimation of any step for imposing penalty is a
condition for the . exercise of the jurisdiction.
0. A. Abraham v. Income-tax Officer, Kottayam, [1961]
2 S. C. R. 765, applied.
MareddevKrishna Reddy v. Income-tax Officer, Tenali
[1957] 31 I. T. R. 678 and Khushiram Murarilal v. Commias-
ioner of Income-tax, Central, Calcutta, [1954] 25 I. T. R. 572,
approved.
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 6 to 8 of 1961.
Appeals from the judgment and order dated
Mav 3, 1957 of the Madras High Court in Writ
Petition Nos. 943 to 945 of 1955.
K. N. Rajagopala Sastri and P.D. Menon, for
the appellants.
V. S. Venkataram and K. P. Bhat, for respon-
flents.
1962. January 18.-The Judgment of the Court
was delivered by
SHAH, J.-These a,re three appeals with certifi-
cates of fitness granted by the High Court of Madras
against orders passed in Petitions for the issue of
writs of certiorari setting aside orders imposing
penalty upon the firm of Messrs. S. V. Veerappan
Chettiar & Co. passed by the Income-tax Officer
under s. 28(l)(c) of the Indian Income-tax Act.
Four persons carried on business in cloth at
Virudhunagar in the name and style of S. V.
Veerappan Chettiar & Co.-hereinafter ca.!led the
firm. The firm was registered under Art. 26A of
the Indian Income.tax Act, 1922, for the assess-
ment years 19!7-48, 1949-50·and 1950-51. The firm
concealed particulars of its income in submitting its
returns, and the Income-tax Officer, Virudhunagar
in the course of assessment proceedings directed, by
order dated May 20, 1954, payment of penalty of
Rs. 20,000/- for the year 1947.48, Rs. 10,000/-for the
JB6Z
T 1u Comntilsio111r of
lncom..tax, M•dr..,
v.
S. V.Antidi
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