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Issues:
1. Imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961. 2. Burden of proof on the Department regarding concealment of income after voluntary disclosure. 3. Assessment of whether the assessee discharged the onus under the Explanation to section 271(1)(c). Analysis: The judgment pertains to the imposition of penalties under section 271(1)(c) of the Income-tax Act, 1961, for the assessment years 1964-65 to 1967-68. The assessee had filed a disclosure under section 14(1) of the Voluntary Disclosure Act of 1976, revealing concealed income of Rs. 50,000 for each assessment year. However, the full tax was not paid, leading to penalties being levied by the Inspecting Assistant Commissioner. Appeals were filed against the penalties, and the Commissioner of Income-tax (Appeals) canceled them. Subsequently, the Income-tax Appellate Tribunal dismissed the Department's appeal, prompting the reference of legal questions to the High Court. The Tribunal had previously upheld the cancellation of penalties for other assessment years, citing the assessee's disclosure to avoid prolonged litigation rather than admitting to concealment. The Tribunal found that the burden of proof had not been discharged by the Department in demonstrating concealment. The Supreme Court's interpretation of section 271(1)(c) in CIT v. Mussadilal Ram Bharose established a presumption against the assessee if the returned income was less than 80% of the assessed income, which could be rebutted with relevant evidence. However, the Tribunal failed to consider this Explanation, incorrectly placing the burden of proof on the Department. The High Court emphasized that the difference between the originally assessed income and the disclosed income was significant, shifting the burden of proof to the assessee. By not addressing this aspect, the Tribunal erred in favoring the assessee. The Court highlighted that the voluntary disclosure without full tax payment constituted an admission of prior income concealment, relieving the Department of further investigation. Consequently, the onus of proof did not rest with the Department post-disclosure, and the declaration itself implied acceptance of income concealment. In conclusion, the Court ruled in favor of the Revenue, holding that the assessee failed to discharge the onus under the Explanation to section 271(1)(c). The judgment reiterated the applicability of relevant Supreme Court decisions and emphasized the consequences of incomplete tax payment under the voluntary disclosure scheme. No costs were awarded in the matter.
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