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Issues Involved:
The judgment deals with the issue of penalty under section 271(1)(c) of the Income Tax Act, 1961, and whether it is leviable in a specific case. Summary: The Additional Commissioner of Income-tax, Rajasthan, applied under section 256(2) of the Income Tax Act, 1961, requesting the Income-tax Appellate Tribunal, Jaipur Bench, to refer a question regarding the levy of penalty under section 271(1)(c) of the Act. The case involved an assessee engaged in the sale of curios and presentation articles, whose income declaration was found unreliable by the Income Tax Officer. The Tribunal allowed the appeal against the penalty imposed by the IAC of Income-tax, Jaipur, leading to the Additional CIT seeking a reference to the High Court. The dispute revolved around whether the assessee had concealed income, triggering the penalty under section 271(1)(c). The revenue contended that the Tribunal's decision to set aside the penalty was erroneous as it failed to establish fraud or wilful neglect on the part of the assessee. The Tribunal's order was challenged on the grounds that it did not adequately consider the statutory presumption created by the Explanation to section 271(1)(c) and did not require the assessee to prove the absence of fraud or wilful neglect. The assessee, on the other hand, argued that the facts and circumstances of the case, including the maintenance of regular books of account, disproved any intentional concealment of income. The High Court analyzed the Tribunal's findings and determined that the burden of proving the absence of fraud or wilful neglect rested with the assessee, as per the Explanation to section 271(1)(c). The Court emphasized that each case must be evaluated on its own merits and that the Tribunal's decision was based on a factual assessment of the evidence presented. Ultimately, the Court concluded that no question of law arose in the case, as the Tribunal's decision was a factual determination based on the evidence at hand. Therefore, the application was rejected, and the parties were directed to bear their own costs.
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