TMI Blog2019 (7) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee/dealer. If the assessee gives an explanation which is unproved but not disproved i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false. The explanation cannot help the Department because there will be no material to show that the amount in question was the income of the assessee. In Commissioner of Income Tax Vs. Suresh Chandra Mittal [ 1999 (7) TMI 34 - MADHYA PRADESH HIGH COURT] it was held that the burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers explanation, which is found to be false by the Assessing Officer. However, proviso to Explanation 1 provides for shifting of this burden again where the explanation offered by the assessee is found to be bona fide. In the instant case, the explanation offered by the assessee was not found to be false by the Assessing Officer, in fact, the reconciliation made by the assessee was accepted for the amount of ₹ 34,51,447/-. The decision in Suresh Chandra Mittal (supra) was affirmed by the Hon'ble Supreme Court [ 2001 (6) TMI 63 - SC ORDER] Tribunal was wron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of the money shown as payable to sundry creditors to ₹ 34,51,447/-. The assessee case is that in order to avoid further problems and to purchase peace from the Department, he offered the said amount for tax. Accordingly, the assessee was assessed to tax under Section 41(1) of the Act by treating the same as deemed to be the assessee's income. The assessee did not challenge the Assessment Order and the same attained finality. 6. Penalty proceedings were initiated under Section 271(1)(c) of the Act. The reply given by the assessee for the show cause notice issued under Section 271(1)(c) did not find favour with the Assessing Officer and accordingly, the penalty was imposed by order dated 28.09.2006. 7. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] to delete the penalty on the ground that the assessee had explained the details regarding the sundry creditors and the amount of ₹ 34,51,447/- was stated to be on account of discount for the goods purchased which were defective etc. Further, the CIT(A) took note of the finding rendered by the Assessing Officer that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levying penalty. 12. Ms.S.Premalatha, learned Standing counsel for the revenue referred to the decision of the Hon'ble Supreme Court in Mak Data (P) Ltd. Vs. CIT -II reported in [2013] 38 taxmann.com 448 (SC). The decision of the High Court of Allahabad in Bajrang Glass Emporium Vs. Commissioner of Income-tax, Agra reported in [2014] 361 ITR 376 (Allahabad). The decision of the High Court of Delhi in Principal Commissioner of Income Tax Vs. Dr.Vandana Gupta in ITA.NO.219 of 2017 dated 20.02.2018 and the decision of this Court in Khandelwal Steel Tube Traders Vs. Income Tax Officer, Ward-(IX)(3) reported in [2018] 95 taxmann.com 15 (Madras). The decision in the case of Dr. Vandana Gupta and Khandelwal Steel Tube Traders (supra) cannot be applied to the facts of the present case, as both the matters arises out of survey/search proceedings. Sofaras the decision in the case of Bajrang Glass Emporium (supra) is concerned , the Tribunal has recorded that after detection has been made by the department, the surrender made by the asseessee does not absolve him from the charge. The facts of the present case is not identical therefore, the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illfulness of the assessee may not be a criteria, the conduct is to be considered. Thus, a mere fact that the addition in this case has been sustained by this Court by itself would not lead to the automatic application to Section 271(1), the Tribunal went into the explanation offered by the assessee as regards the charging of a higher amount in the case of J.B.Exports . Although, the Tribunal rejected the explanation for the purpose of assessment of goods, it considered it as a good ground for cancellation of penalty, when the explanation on the differential amount was given by the assessee that the entries were made in the account and the Accountant had not made the correct entry. 11. In a recent decision of the Hon'ble Supreme Court in Civil Appeal No.9772 of 2013, dated 30.10.2013 Mak Data P. Ltd., vs. Commissioner of Income Tax-II,[2013] 38 taxmann.com 448, the Hon'ble Supreme Court while considering the Explanation to Section 271(1), held that the question would be whether the assessee had offered an explanation for concealment of particulars of income or furnishing inaccurate particulars of income and the Explanation to Section 271(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income as with the hypothesis that it does. 17. It is further pointed out that if the assessee gives an explanation which is unproved but not disproved i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false. The explanation cannot help the Department because there will be no material to show that the amount in question was the income of the assessee. 18. In Commissioner of Income Tax Vs. Suresh Chandra Mittal reported in [2000] 241 ITR 0124, it was held that the burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers explanation, which is found to be false by the Assessing Officer. However, proviso to Explanation 1 provides for shifting of this burden again where the explanation offered by the assessee is found to be bona fide. In the instant case, the explanation offered by the assessee was not found to be false by the Assessing Officer, in fact, the reconciliation made by the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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