1981 (4) TMI 125 - AT - Income Tax

Summary

Issues:
- Controversy regarding the cancellation of penalty under s. 271(1)(c) amounting to Rs. 22,000 for asst. yr. 1975-76.

Detailed Analysis:

1. The facts of the case involve the assessee deriving income from a cane crusher, with a deposit of Rs. 20,000 appearing in the account of a deceased individual, Shri Rasaloo. The assessee produced Shri Nepal Singh, a close relation of the creditor, who confirmed the transaction. The ITO, however, included the amount in the assessment and levied a penalty under s. 271(1)(c) for concealment of income. The ld. AAC canceled the penalty, stating that there was no evidence of fraudulent conduct by the assessee.

2. The Revenue appealed the decision, arguing that the onus was on the assessee to prove the non-fraudulent nature of the income difference. The ld. counsel for the assessee relied on judicial pronouncements to support the argument that the penalty should not have been levied. The Tribunal noted that penalty under s. 271(1)(c) cannot be imposed solely based on the rejection of the explanation without evidence of deliberate concealment.

3. The Tribunal emphasized that the Revenue must establish that the amount in question was the assessee's own suppressed income to levy a penalty under s. 271(1)(c). Merely rejecting the explanation provided by the assessee does not warrant penalty imposition. In this case, the assessee provided a plausible explanation for the cash credit, supported by proper entries, interest payments, and a confirmatory letter. Despite the rejection of the explanation by the authorities, there was no evidence of deliberate concealment or fraudulent conduct by the assessee.

4. Based on the established legal principles and considering the facts of the case, the Tribunal upheld the ld. AAC's decision to cancel the penalty. The Tribunal dismissed the Revenue's appeal, concluding that there was insufficient evidence to justify the imposition of the penalty under s. 271(1)(c).

5. In conclusion, the appeal by the Revenue failed, and the decision to cancel the penalty under s. 271(1)(c) amounting to Rs. 22,000 for the relevant assessment year was upheld by the Tribunal.