CHINNAPPA REDDY, J.

( 1 ) THE Income-tax Appellate Tribunal, Hyderabad Bench has stated a case and referred to Bench has stated a case and referred to us for our decision the following question:"whether on the fact and in the circumstances of the case, proceedings for the imposition of penalty have been commenced validly and within the time limits, if any, prescribed by the Income-tax Act 1961?"the facts are as follows: - The assessee is a firm dealing in gunnies, twines etc. For the assessment year 1961-62 the firm returned a total income of Rs. 99,672. 00, The Income-tax Officer, however, held that the total income of the assessee was Rs. 1,57,434. He found that the firm had camouflaged certain of its transactions as those of a different firm and another individual. The assessment was completed on 5-6-1962 and in the order of assessment the Income-tax Officer observed:"since the firm has deliberately diverted its profits by creating a bogus firm and carried on business in the name of another person viz. , T. Narasimhamurthy, action under Section 28 (1) (c) has been taken separately", On 5-6-1962 itself the Income-tax Officer passed the following order in the order sheet: "order d

Click Here to Read the rest of this document