9911796707
TMI Blog1975 (6) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. He started penalty proceedings under s. 271(1)(c) of the IT Act, 1961, and asked the assessee to explain as to why she should not be penalised. It appears that the notice fixing the hearing on 21st Oct., 1973 was served on the assessee on 13th Oct., 1973 but the assessee did not avail of the said opportunity to explain her case. The ITO proceeded with the penalty proceedings exparte. He found that the estimate of income as made by him in the quantum assessment in the lodging section as well as the restaurant section was substantially confirmed, on appeal, by the Tribunal. The only reduction that was allowed was in respect of profit from the lodging house section where the Tribunal found that the lodging house business was carried on for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lodging section which he worked out at Rs. 9,730. 4. Aggrieved by the above order of the AAC the assessee is in appeal before us. Sri S.N. Sahu the learned Representative for the assessee, contended before us that the AAC should have accepted the explanation as satisfactory in full. He argued that there was no basic difference between the estimate of the restaurant section and the lodging section in as much as both the department's profits returned by the assessee were not accepted due to each of supporting evidence or other defects in the accounts produced. He stated that the assessee never got an adequate opportunity to produce the lodging register before the authorities below. He stated that the assessee was a lady carrying in busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(c) of the Act. The admitted facts are that the assessee is a lady carrying on business through her employees and that the income returned by her from the lodging section was not accepted by the ITO on the ground that the bills maintained in respect thereof were not satisfactory and that the lodging register was not produced before him. He proceeded on the footing that there were ten rooms for being let out rejecting the assessee's explanation that there were only two rooms which were used for business during the year under consideration. On appeal, the Tribunal rejected the contention of the assessee that only two rooms were used because there was no evidence in support thereof. There is no materia on record from which it could be inferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished inaccurate particulars of her income or that she was guilty of fraud or gross or wilful negligence in returning her correct income. Considering all the facts and circumstances of the case, we come to the conclusion that the assessee discharge the onus that lay on her under the Explanation to s. 271(1)(c) of the Act in respect of the estimate of the income of the lodging section. We derive support for the above conclusion of ours from the decision in the case of CIT vs. S.P. Bhat 97 ITR 440 (Guj) relied on by the assessee. In the result, we cancel the penalty and allow the appeal. The ITO officer is directed to refund the amount of the penalty, if already recovered, to the assessee. 7. In the result, the appeal is allowed. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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