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Issues:
1. Whether the Appellate Tribunal was right in canceling the penalty under section 271(1)(c) for the assessment year 1964-65? 2. Whether findings of the Appellate Assistant Commissioner post the penalty order can be considered in deciding the penalty appeal? 3. Whether the Tribunal's finding on the absence of fraud or neglect by the assessee is reasonable? Analysis: The case involved penalty proceedings under section 271(1)(c) of the Income-tax Act for the assessment year 1964-65. The assessee, carrying on business as Asok Pictures, had a credit entry of Rs. 35,000, which was considered as income. The Income-tax Officer imposed a penalty of Rs. 10,000, upheld by the Appellate Assistant Commissioner. However, the Tribunal canceled the penalty but upheld the quantum appeal. The Tribunal emphasized that post-penalty order actions by the Appellate Assistant Commissioner cannot be considered in the penalty order, as they were not part of the initial assessment. In analyzing the case, the court referred to the burden of proof on the assessee to show no intention to conceal income under section 271(1)(c). The court noted the applicability of the Explanation to the section, which deems concealment if income returned is less than 80% of the correct income, unless lack of fraud or neglect is proven. The court distinguished the case from CIT v. Anwar Ali, as the applicable provision was under the 1961 Act, not the 1922 Act. The court disagreed with the Tribunal's approach of placing the burden on the Revenue to prove concealment, emphasizing the assessee's obligation to demonstrate lack of intent to conceal. Ultimately, the court ruled in favor of the Revenue on the first question, stating the Tribunal erred in canceling the penalty. However, the court declined to answer questions 2 and 3 as they were deemed not relevant to the case. The judgment concluded by instructing the forwarding of a copy to the Income-tax Appellate Tribunal, Cochin Bench for further action.
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