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TMI Blog1977 (11) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ted its income at Rs. 25,463. On appeal the AAC granted some relief to the assessee and estimated its income at Rs. 19,963. 3. For concealing its income and giving inaccurate particulars thereof penalty proceedings were initiated against the assessee. In response to the show cause notice, the assessee contended that this was a case of mere estimate and as such no penalty was leviable on it. The ITO rejected this contention and levied a penalty of Rs. 18,500 on the assessee under s. 271(1)(c) of the IT Act, 1961. 4. On appeal, the AAC did not agree with the ITO and cancelled the penalty in question. While doing so, he observed as follows: "The appeal is against imposition of penalty for alleged concealment of income by the appellant. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appellant. It is argued that since this onus has not been discharged and the malafide of the appellant has not been proved, the penalty imposed is bad in, law and deserved to be quashed. In this context the counsel has cited the case of CIT vs. Patna Timber Works 1975 CTR (Pat) 25, of Patna High court wherein the Patna High Court has upheld the Tribunal's finding in this regard. The Tribunal had in its order deleted the penalty imposed by holding that if the appellant fails to declare the return corresponding to what the Revenue authorities have estimated his correct income is not result of a fraud or gross or wilful neglect. In view of this it is argued that the penalty levied should be cancelled. There is considerable merit in the arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im exceeded the income returned by the assessee. In our view, this fact alone is not sufficient to penalise the assessee. The argument of the learned Representatives of the Department that the Explanation to s. 271(1)(c) applies to this case is also of no significance. For in the first instance, the ITO has not relied upon this Explanation. Secondly, there is no material on record to prove that the assessee had dishonestly or fradulently returned incorrect income. The fact remains that the enhancement in the income had resulted merely from an estimate. Now the estimate of one person is bound to differ from that of another. This is obvious even from the estimates made by the ITO and the AAC in the present case. It cannot, therefore, he said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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