9911796707
TMI Blog1998 (6) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... arch was carried out at the premises of the assessee on September 29, 1975. Certain gold and silver ornaments were found. It was also noticed that there were immovable properties in the name of Smt. Manguben, the karta's wife. The assessee subsequently made a voluntary disclosure of his income. Fresh returns were also filed by him. Proceedings were initiated against the assessee in respect of the assessment years 1968-69 to 1973-74. In the present proceedings, we are concerned with household expenses of the assessee for two years 1968-69 and 1969-70. There were nine members in the family of the assessee. Considering the large family of the assessee, his social status, the fact that three daughters were studying and further that three daughters got married between 1968-69 and 1974-75, the Income-tax Officer (ITO) held that the household expenses shown by the assessee were extremely low. He, therefore, estimated such expenses at Rs. 11,000 adding Rs. 6,685 for the assessment year 1968-69 and at Rs. 12,000 adding Rs. 6,967 for the assessment year 1969-70. By an order dated March 28, 1977, the Income-tax Officer also directed to issue notice to the assessee to show cause as to why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B. B. Nayak instructed by Mr. M. R. Bhatt, learned counsel for the Revenue. Mr. Talati submitted that the entire proceeding's were conducted and the findings were recorded on the basis of the ordefs passed in the assessment proceedings. He submitted that the two proceeding's are entirely different, i.e., assessment proceedings and proceeding's for imposition of penalty on the assessee. Even if in the assessment proceedings, the authorities were not satisfied regarding the quantum of household expenses for the assessment years 1968-69 and 1969-70 and the orders were passed increasing the said amount, an order of imposition of penalty could not have been passed by the authority on that basis. It was submitted that the burden which was on the Department to prove concealment of income on the part of the assessee under section 271(1)(c) of the Act had not been discharged and the orders were, therefore, unlawful. It was submitted that reasonable explanation was submitted by the assessee in the form of an affidavit which is at annexure G. It was stated that the assessee was an orthodox man and the family was also living in a simple way and the yearly expenses was very meagre. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar finding was recorded regarding inference of concealment of income for the assessment year 1969-70. The appellate authority vide his order dated July 14, 1981, dismissed the appeals holding that he was satisfied that the domestic expenses disclosed were totally inadequate and the assessee had undisclosed income from other sources from which he supplemented the disclosed drawing's. Accordingly, the orders passed by the Income-tax Officer were confirmed. When the matters reached the Tribunal, the Tribunal vide its order dated October 29, 1982, observed in para. 4 as under: "All these explanations may be true but even then the withdrawal for household expenses appears to be unbelievably low." (emphasis supplied) The Tribunal proceeded to observe: "They are too low that not only third persons cannot believe them but we cannot accept that the assessee himself could have stated them with any genuine belief. Although in this case the addition has been made in such circumstances that it can be said that the assessee did have the income which was ultimately upheld by the Tribunal and which he knew he had." Looking to all the orders passed by the authorities, it is clear that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or had deliberately furnished inaccurate particulars in respect of his income, no penalty could be imposed. Our attention was also invited to various other decisions. In CIT v. Vinaychand Harilal [1979] 120 ITR 752 (Guj) and in CIT v . Navnitlal Pocha-lal [1995] 213 ITR 69 (Guj), this court following Anwar Ali s case [1970] 76 ITR 696 (SC), held that even the admission of an assessee that a particular amount belonged to him is not sufficient to entail penal consequences and an order of penalty cannot be imposed on him on the basis of such admission. It is necessary that such admission must relate to the income of the assessee and that it must have either been admitted or proved that such income was for a particular year. In the absence of such admission and/or finding no order of penalty can be imposed on the basis of the order of assessment passed by the authorities (vide Vinaychand Harilal's case [1979] 120 ITR 752 (Guj)). In Navnitlal Pochalal's case [1995] 213 ITR 69 (Guj), this court observed that on the ground that the proceedings were initiated and the amount was increased, the Revenue cannot be said to have discharged its burden that the amount represented concealed inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form of affidavits could not be ignored. In the instant case, the affidavit on which reliance was placed was not filed in the penalty proceedings but was filed in the assessment proceedings. But in view of the fact that the burden is on the Department and since that burden was not discharged, no further question arises. Mr. Nayak, no doubt, placed strong reliance on the decision of the High Court of Punjab and Haryana in Vidya Sagar Oswal v .CIT [1977] 108 ITR 861 referred to above. In that case, the assessee was an industrialist. He had shown his total income as Rs. 86,029 and had shown his household expenses as Rs. 2,000 which amount was withdrawn and was debited to his account at the end of the year as per the account book. In the light of those facts, the authorities did not believe this version. In our opinion, the case was decided on its own facts and it has no application. Mr. Nayak placed reliance on Explanation 1 to section 271(1)(c). As stated hereinabove, in the letter written by the Income-tax Officer, it was mentioned that there was "deliberate concealment" on the part of the assessee and none of the authorities relied upon the Explanation. Hence, no order can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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