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TMI Blog2010 (2) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... ncorrect particulars by the appellant. Of course, the situation would have been different in case the appellant would have been dealing with the persons who are literate or urban people. In a country where 40 per cent. persons are living below poverty line and equal percentage of people, are illiterate, then while proceeding ahead to impose penalty under sub-section (1) of section 271 of the Act, the assessing authority or taxing authority must look into the surrounding facts and circumstances and social status of persons who are engaged in the business. Decided in favor of assessee. - ITA NO 62/03 - - - Dated:- 9-2-2010 - DEVI PRASAD SINGH and DEVENDRA KUMAR ARORA JJ. For Appellent - Jaideep Narain Mathur , senior advocate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessment year 1992-93 against the imposition of penalty in pursuance of the provisions contained under section 271 of the Act. It has been stated that before the Assessing Officer, as many as 62 creditors (honey suppliers) were named in the records, who were finally paid their entire dues in the next financial year. During the course of the assessment, all the 62 persons failed to appear before the Assessing Officer. However, the Assessing Officer wanted the appellant to produce them to verify the genuineness of pur-chase, sale and maintenance of records of the creditors. As many as 12 such creditors were picked randomly by the Assessing Officer and notices were issued to them under sub-section (6) of section 133 of the Act requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the instance of surrendering the amount of Rs.1 lakh, no inference may be drawn that the appellant has concealed material facts. It has been held by the appellate authority that the surrender of amount has been made considering the con-venience for getting assessment completed. The appellate authority further held that there appears to be no material on record which may substantiate the submission of the Revenue with regard to concealment of fact. The addition may be correct for the tax purpose but it cannot be the basis for imposition of penalty. 6. However, the order of the Commissioner Income-tax (Appeals) has been reversed by the Tribunal. While passing the impugned order, the Tribunal reiterated the finding recorded by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT [2001] 251 ITR 99 (SC) can be applied in the circumstances of the present case even though the Department could not produce any positive material against the appellant to show concealment of income or furnishing of incorrect particulars by the appellant ?" 8. For imposition of penalty under clause (c) of sub-section (1) of section 271 of the Act, it shall be necessary for the Assessing Officer to be satisfied with regard to concealment of particulars of income or furnishing of inaccurate particulars. The Assessing Officer is a quasi-judicial authority and while taking decision under sub-section (1) of section 271 of the Act, he has to record his satisfaction and unless satisfaction is recorded based on certain material with regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the appellant and taken their dues. The plead-ing as contained in paragraph 12 of appeal, have not been rebutted by filing a response. Accordingly, treating the pleading contained in paragraph 12 of the appeal as correct, the absence of five persons in response to the notice sent under sub-section(6) of section133 of the Act, does not seem to create a ground to disbelieve the contention of the appellant. 10. So far as question No.1 is concerned, is replied in affirmation and it is held that normally trade practice followed by the appellant in the business while dealing with rustic persons and nomadic tribals, should not have been doubted by the assessing authority. The order passed by the appellate authority reversing the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... si-criminal in nature and, thus, burden lies on the Department to establish that the assessee had con-cealed his income. Since burden of proof in penalty proceedings varies from that in the assessment proceeding, a finding in an assessment proceeding that a particular receipt is income cannot automatically be adopted, though a finding in the assessment proceeding constitutes good evidence in the penalty proceeding. In the penalty proceedings, thus, the authorities must consider the matter afresh as the question has to be considered from a different angle. It is now a well-settled principle of law that the more stringent is the law, more strict construction thereof would be necessary. Even when the burden is required to be discharged by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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