THE COMMISSIONER OF INCOME TAX, KERALA vs. SMT. P.K. KOCHAMMU AMMA PEROKE

CIVIL APPEAL No. 1086/1973Supreme Court[1981] 1 S.C.R. 78123 September 1980Bench: 2 JudgesAuthor: P.N. BHAGWATI, E.S. VENKATARAMIAH8 pages
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court, while noting that the term "his income" in Section 139(1) must include every item of income that makes up the assessee's total income, including income includible under Section 64, acknowledged a binding precedent from a three-judge bench in V.D.M.RM.M.RM. Muthiah Chettiar v. Commissioner of Income Tax (74 ITR 183 SC). In that case, it was held that in the absence of a specific column in the prescribed return form for disclosing the income of a spouse or minor child, there was no obligation on the assessee to disclose such income, and thus no concealment. Although the Court expressed reservations about the correctness of the Muthiah Chettiar decision, especially in light of the amendment to Rule 12 effective from April 1, 1972, which introduced a specific column for such disclosures, it was bound by the earlier judgment. Therefore, the Court held that the assessee could not be said to have concealed her income by not disclosing the shares of her husband and minor daughter in the return filed by her. The appeal was dismissed.

What were the facts?

The assessee, Smt. P.K. Kochammu Amma Peroke, was a partner in two firms, M/s. Malabar Tile Works and M/s. Malabar Plywood Works, along with her husband and minor daughter. For the assessment year 1964-65, she filed a return of income but omitted to include the shares of her husband and minor daughter in the partnership profits, which were includible under Section 64(1)(i) and (iii) of the Income Tax Act, 1961. The Income Tax Officer included these amounts, totaling Rs. 59,506, in her assessment and referred the case for penalty proceedings. The Assistant Appellate Commissioner imposed a penalty of Rs. 7,000 for concealment of income. The Tribunal set aside the penalty order, and the High Court affirmed the Tribunal's decision. The Revenue appealed to the Supreme Court.

What were the issues?

1. Whether the assessee's failure to include the income of her spouse and minor child in her return for assessment year 1964-65, though includible under Section 64(1)(i) and (iii), entails a penalty under Section 271(1)(c) of the Income Tax Act, 1961, given that the unamended Rule 12 of the Income Tax Rules, 1962, prior to March 31, 1972, did not provide a specific column for such disclosure. Assessee's Contention: The assessee argued that the prescribed form for the return of income did not have a specific column for disclosing the income of a spouse or minor child includible under Section 64. Therefore, she could not be held liable for concealment. Revenue's Contention: The Revenue contended that the term "his income" in Section 139(1) and the Note in the prescribed form required the assessee to disclose all income includible in her total income, including that of her spouse and minor child under Section 64. Failure to do so constituted concealment.

Which sections of the Income-tax Act were involved?

Section 64(1)(i),Section 64(1)(iii),Section 271(1)(c),Section 139(1)

AI-generated summary — verify with the full judgment below

l ' THE COMMISSIONER OF INCOME TAX, KERALA v. SMT. P.K. KOCHAMMU AMMA PEROKE September 23, 1980 [P. N. BHAGWATI AND E. S. VENKATARAMIAH, JJ.] Penalry, imposition of-Assessee faiied to include the income of the spouse 'flnd minor child in the return of income for the assessment year 1964-65. though includible under s. 64(1) and (iii)-Whether failure entails penalty under s. 271(I)(c) of the Income Tax Act, 1961, as the unamended Rule 12 of the 1961 (prior to 31-3-1972) did not provide any column in the pre~cribed form- Jncome Tax Act, 1961, ss. 2(45), 4, 5, 64(1)(i) and (iii), 139 and 271(1){c) read with Rule 12 of the lllcome Tax Rulu, 1962,_scope of-Words and phrases "his income" meaning of.

The respondent asses see was. a partner in the partnership firms of MI s.

Malabar Tile Works and M/s. Malabar Ply,wood Works and alongwith .her there were other partners including her husband and minor daughter. In her returns for the assessment year 1964-65 for which the relevant accounting year . was the calendar year ending 31st D~cember, 19(i3, the assessee filed a return. of income omitting the amounts representing the shares of her husband and minor daughter in the

The order continues below.

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