9911796707
TMI Blog1975 (11) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... t, filed the return. The case was posted for hearing on 14th Dec., 1971 but actually it was taken up on 10th Dec., 1971 itself. At that time the ITO found that in the statement given by the assessee certain receipts were not included. These receipts were from work done with the Executive Engineer, Irrigation Division, Calicut. The assessee then took time and then filed a revised return on 27th Dec., 1971 in which he included a further receipt of Rs. 1,17,633. The income shown in this revised return was Rs. 33,020. The ITO completed the assessment by estimating the net income at 12 1/2 per cent on the returned receipts as per revised return. He also initiated penalty proceedings. 2. The assessee's explanation for the omission of the recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omitted amounts to 1/3rd of the total receipts. There can be no presumption that no assessee will chit receipts from Government Departments. It is not a fact that the assessee had shown a receipt of Rs. 12,059 voluntarily which the ITO was not aware. He further submitted that the case law in the case of Anwar Ali (76 ITR 796) will not apply because this is a case where explanation to s. 271(1)(c) is attracted. The learned counsel for the assessee, on the other hand, submitted that the omission was merely an act of inadvertence and the assessee himself had a doubt and that is why the case which was fixed for hearing on 14th Dec., 1971 was actually taken up three days earlier on 10th Dec., 1971 itself. Since the omission was pointed out the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of s. 271(1)(c). 7. We have next to see whether the assessee can be deemed to have concealed the income by virtue of the Explanation. The original return showed an income of Rs. 21,240 and he was assessed at Rs. 41,270. The income returned was definitely less than 80 per cent of the income which was finally assessed. Therefore, unless he is able to show that there is no gross or wilful neglect or fraud an inference of concealment will have to be drawn and this onus of showing that is on the assessee. The degree of proof required to discharge the onus has been given by the Gujarat High Court in the case of CIT vs. S.P. Bhatt 97 ITR 440 (Guj). They have held that the burden cast on the assessee by this Explanation is not of the same n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd gross neglect. 'Neglect' has been defined as the omission to do something which a reasonable man guided upon those considerations which ordinarily regulate the conduct of human affairs would do or doing something which a prudent or reasonable man would not do. In Venkata Ramaya's Law Lexicon Vol. 2 page 524 it is mentioned "there is distinction between negligence and gross negligence, although the exact dividing line is difficult to demarcate. "Gross Negligence" connotes high degree of negligence; it is negligence not arising merely from some want of foresight or mistake of judgment but from some culpable default". 9. At the first we were inclined to agree with the learned Departmental Representative that there was gross negligence, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient. It was stated before us that the bank account did not reflect these receipts having been encashed through some accommodation parties. We are not aware of the correct position and neither has the Department been told about this. We, therefore, think that this is a point on which further clarification is necessary. We are sending the matter back to the AAC in order to determine this point. He will find out how these cheques were encashed by the assessee and what documents were available with him which could reflect the encashment of them. If it was through his bank account, then we feel that the Department's case for gross negligence is met out. If the bank accounts do not show these receipts then perhaps the assessee might have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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