High Court Of Allahabad
Sadi Ram Ganga Prasad vs. CIT
Sections 37(1), 147(b), 256(2)
R.M. Sahai & Om Prakash, JJ.
IT Appln. No. 22 of 1985
2nd November, 1987
R.S. Agarwal, for the Assessee : Standing Counsel, for the Revenue
R.M. SAHAI, J.:
In this application filed under s. 256(2) of the IT Act, 1961, by the assessee, as many as six questions have been raised. From a perusal of the order of the Tribunal passed under s. 256(i) of the Act, it appears, however, that only two questions were raised. As regards the remaining questions, they were orally raised but not pressed. Therefore, the assessee is not entitled to reiterate the same questions and ask this Court to ask for a statement of the case on the questions which were given up before the Tribunal.
2. As regards the two questions on which the arguments have been advanced on behalf of the assessee, it may be mentioned that as regards question No. 1 regarding deduction of penalty of Rs. 3,000, the matter stands covered by the decision of the Supreme Court in Haji Aziz & Abdul Shakoor Bros. vs. CIT (1961) 41 ITR 350 (SC), where it was held by the hon’ble Court (headnote): ” No expense which was paid by way of penalty for a breach of the law, even though it might involve no personal liability, could be said to be an amount wholly and exclusively laid out for the purpose of the business of the assessee within the meaning of s. 10(2) of the IT Act and the fine paid by the assessee was not an allowable deduction under that section.”
3. In the circumstances, we do not consider it, necessary to call for a statement on this question.
4. As regards question No. 2, it has been found by the Tribunal that there was information before the ITO to initiate proceedings under s. 147(b). In fact, the assessee did not disclose in its return that the amount of Rs. 3,000, which was discovered later, was paid by way of penalty. When this information became available to the ITO, he initiated proceedings for reassessment under s. 147 (b). It cannot, in the circumstances, be said that initiation of proceedings was without jurisdiction. The Tribunal having recorded a finding of fact, no question of law arises.
5. In the result, the application is rejected.
[Citation : 172 ITR 129]