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Levy of penalty under section 271(1)(c) of the Income Tax Act for concealment of income. Analysis: The High Court of Orissa was tasked with determining the legality of the penalty imposed under section 271(1)(c) of the Income Tax Act for concealment of income by the assessee for the assessment years 1962-63, 1963-64, and 1964-65. The case revolved around the addition of cash credits by the Income-tax Officer and subsequent penalties imposed by the Inspecting Assistant Commissioner due to the assessee surrendering the amount for want of evidence. The Appellate Tribunal, in its decision, emphasized that the surrender of the amount is not conclusive evidence of concealment of income and highlighted the absence of positive evidence by the revenue to prove the impugned cash credits were concealed income. The Tribunal's decision was influenced by the Supreme Court's ruling in Commissioner of Income-tax v. Anwar Ali [1970] 76 ITR 696 (SC), emphasizing the burden of proof on the department in cases of concealment of income. The court examined section 271(1)(c) of the Income Tax Act, particularly the Explanation added with effect from April 1, 1964, which shifts the burden to the assessee to prove that the failure to return the correct income did not arise from fraud or neglect. The court referred to previous judgments in similar cases, such as Commissioner of Income-tax v. K. C. Behera [1976] 103 ITR 479 (Orissa) and Commissioner of Income-tax v. Laxmi Auto Stores [1977] 106 ITR 626 (Orissa), to establish the legal position. The court criticized the Appellate Tribunal for wrongly placing the burden of proof on the revenue and overlooking the provisions of the Explanation, thereby vitiating its conclusion. Additionally, the court addressed the contention raised by the assessee's representative regarding the misleading nature of notices issued by the Inspecting Assistant Commissioner, leading to the assessee not presenting evidence. However, as the notices were not before the court, it refrained from making a definitive judgment on this aspect. The court emphasized that such contentions should be raised before the Appellate Tribunal for proper consideration in accordance with the law. Ultimately, the High Court held that the levy of penalty under section 271(1)(c) of the Income Tax Act was in accordance with the law in the given facts and circumstances, considering the Explanation added to the section. The court directed each party to bear their own costs, noting that the judgments cited were delivered post the Tribunal's disposal of the appeals.
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