Judgement

SHAH, J.: In determining the taxable income of the respondent firm for the assessment year 1948-49 the Income-tax Officer added to the income returned a sum of Rs. 1,60,000 as undisclosed receipts . The order was confirmed in appeal by the Appellate Assistant Commissioner, and by the Tribunal. The Income-tax Officer had in the meantime commenced a proceeding for the levy of penalty and in exercise of the power under Section 28 (1) (c) of the Indian Income-tax Act, 1922 he directed the respondent firm to pay Rs. 60,000 as penalty. The Appellate Assistant Commissioner in appeal confirmed the order. The Income-tax Appellate Tribunal rejected the contention of the respondent that the order imposing penalty upon the firm after the original firm was dissolved was without jurisdiction.

2. The Tribunal referred at the instance of the respondent firm the following question to the High Court of Patna for opinion.

"Whether on the facts and in the circumstances of the case the imposition of penalty under Section 28 (1) (c) of the Indian Income-tax Act, upon the petitioner firm (respondent) as constitute at the time of levy of penalty was legal and valid?"

8. The High Court called for a