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TMI Blog2007 (5) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... m dividend and interest. The banker of the assessee was the Syndicate Bank. A power of attorney was given by the appellant in its favour. The shares of the companies which the appellant owned were lodged with and in the custody of the said bank. Under his instructions, the bank used to purchase shares of various companies and kept with it the physical possession thereof. It has also sold the shares of the appellant and delivered the same to the brokers or the parties and also used to pay or receive the sale proceeds and deposit the same in the bank account. The said arrangement continued for a number of years in the past. Tax matters of the appellant were being looked after for a number of years by the Law Agency Division of the Syndicate Bank, Manipal, which was authorised to file the returns of income before the tax authorities representing the assessee herein. For the assessment year 1985-86 the return of income on behalf of the appellant was filed on February 13, 1989. The respondent, however, being not satisfied with the return, called for better particulars of investments made by the appellant, whereupon a revised return was filed on January 12, 1990, furnishing all the requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d taken by the bank manifestly makes it clear to us that they prepared the return of income on the basis of information furnished by the assessee. The assessee is an engineer and a tax payer for a number of years cannot contend that he signed the return of income by believing his power of attorney holder. This contention of the assessee cannot be believed for the reason that in his revised return dated January 12, 1990, again declared a loss of Rs. 1,04,531 and did not admit the capital gains and other income. The first appellate authority rightly holds that if the explanation of the assessee is accepted then every tax evader could take shelter by shifting the blame on his clerk and accountants who invariably prepare the return for them. The contention of the assessee that because of the negligence on the part of the bank the mistake of concealment has crept in is not acceptable." Mr. G. Sarangan, learned senior counsel appearing on behalf of the appellant, would submit that the Tribunal having arrived at a finding of fact that the appellant was not guilty of deliberate concealment of his income and thus, having no mens rea in this behalf, the impugned judgment cannot be sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived at the finding of concealment of income on the basis of the material on record, no question of law arose, reference of which could be called for." It is, therefore, trite that if an explanation given by the assessee with regard to the mistake committed by him has been treated to be bona fide and it has been found as of fact that he had acted on the basis of wrong legal advice, the question of his failure to discharge his burden in terms of the Explanation appended to section 271(1)(c) of the Income-tax Act would not arise. In Dilip N. Shroff v. Joint CIT (civil appeal arising out of SLP (C) No. 26831/2004) delivered today, this court observed: "The expression 'conceal' is of great importance. According to Law Lexicon, the word 'conceal' means: 'to hide or keep secret. The word 'conceal' is con+celare which implies to hide. It means to hide or withdraw from observation; to cover or keep from sight; to prevent the discovery of ; to withhold knowledge of. The offence of concealment is, thus, a direct attempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities.' In Webster's Dictionary, 'inaccurate' has been defined as : 'not accur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall apply thereto. The ingredients for imposing penalty remain the same. The purpose of the Legislature that it is meant to be a deterrent to tax evasion is evidenced by the increase in the quantum of penalty, from 20 per cent. under the 1922 Act to 300 per cent. in 1985. "Concealment of income" and "furnishing of inaccurate particulars" carry different connotations. Concealment refers to a deliberate act on the part of the assessee. A mere omission or negligence would not constitute a deliberate act of suppressio veri or suggestio falsi. We may notice that in Addl. CIT v. Jeevan Lal Sah [1994] 205 ITR 244 this court dealt with the amendment of section 271(1)(c) made in the year 1964 to hold: "Even after the amendment of 1964, the penalty proceedings, it is evident, continue to be penal proceedings. Similarly, the question whether the assessee has concealed the particulars of his income or has furnished inaccurate particulars of his income continues to remain a question of fact. Whether the Explanation has made a difference is-while deciding the said question of fact the presumption created by it has to be applied, which has the effect of shifting the burden of proof. The enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the quantum of penalty. Section 271(1)(c) and clause (iii) relate to the conditions for imposition of penalty, whereas, on the other hand, Explanation 4 to section 271(1)(c) relates to the computation of the quantum of penalty. 28. The provisions of section 271(1)(c)(iii) prior to April 1, 1976, and after its amendment by the Taxation Laws (Amendment) Act, 1975 with effect from April 1, 1976, the later provisions being applicable to the assessment year in question, are substantially the same except that in place of the word 'income' in sub-clause (iii) to clause (c) of section 271 prior to its amendment by the Taxation Laws (Amendment) Act, 1975, the expression 'amount of tax sought to be evaded' have been substituted. Explanation 4 inserted for the purpose of clause (iii) where the expression 'the amount of tax sought to be evaded', was inserted had in fact made no difference in so far as the main criteria, namely, absence of tax continued to exist, prior to or after April 1, 1976, changing only the measure or the scale as to the working of the penalty which earlier was with reference to the 'income' and after the amendment related to the 'tax sought to be evaded'. The sine qua ..... 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