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TMI Blog1966 (8) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 28(1)(c) of the Act was justified ?" The relevant part of section 28(1)(c) is in these terms : "If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, in the course of any proceedings under this Act, is satisfied that any person- (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, he or it may direct that such person shall pay by way of penalty,. . . in the cases referred to in clauses (b) and (c), in addition to any tax payable by him, a sum not exceeding one and a half times the amount of the income-tax and super-tax, if any, which would have been avoided if the income as returned by such person had been accepted as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of the discrepancy and not the average rate for the year." They finally came to the conclusion that : "Having due regard to all the foregoing facts and circumstances, in our opinion, an addition of Rs. 30,000 would meet all the requirements of the case." In paragraph 4 of the statement of the case, the discrepancies referred to by the Tribunal in their order, annexure "A", have been stated thus : "According to the account sales from the consignees the weight of first consignment of 208 bags (seven bags found short in packing) was cds. 42-9 mds. 5lbs., and the weight of the other consignment of 72 bags was cds. 11-11 mds. 9 lbs. There was thus a difference of 14 candies and odd in the stock as between the quantities entered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In appeal, however, the order imposing penalty was set aside by the Appellate Assistant Commissioner and in further appeal, the Tribunal restored the order passed by the Income-tax Officer. The three orders are, respectively, annexures "B", "C" and "D" to the statement of the case. The question that arises for determination is whether the order annexure "D", can be justified on the facts and in the circumstances of the case already referred to. That the proceedings under section 28 are in the nature of a penal proceeding can no longer be doubted. This court stated in Maney and Co. v. Commissioner of Income-tax : "The onus of proof is on the department and the degree of proof is that of a criminal prosecution ; the mere preponderence of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfy himself whether the assessee was guilty of the charge against him under section 28." As we read the order of the Tribunal, which is annexure "D", the only question that they have considered in the order is as to whether the explanation made out by the assessee is acceptable or not and they have come to the conclusion that such an explanation is not acceptable. This, we do not think, would necessarily lead to the conclusion that the assessee had furnished wrongful particulars of his income, or deliberately furnished inaccurate particulars of such income, one of which at least is essential in order to apply section 28(1)(c) under which proceedings had been taken. We may extract in extenso the paragraph in annexure "D" which deals wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Commissioner was not correct in cancelling the same." These we consider are hardly sufficient to posit that there has been such default on the part of the assessee as contemplated by section 28(1)(c). It is not as though that the discrepancies found in the stock register cannot have any explanation whatever. In fact, the Appellate Assistant Commissioner found the explanation made by the assessee acceptable. Even otherwise we feel that there must be a positive element of proof in such matters. There must be some material available from which it is possible to draw the inference that either the goods were with the assessee in kind or were converted into cash and thus he had acquired income during the accounting period. Not only the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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