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TMI Blog1973 (1) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... dmission was incorrectly made or should not be relied upon, no fault can be found with the income-tax authorities levying the penalty on the assessee - question referred to us is, therefore, answered in the affirmative - - - - - Dated:- 3-1-1973 - Judge(s) : PREM CHAND PANDIT., BHOPINDER SINGH DHILLON. JUDGMENT B. S. DHILLON J.-This judgment will dispose of Income-tax Reference No. 12 of 1972. Briefly stated, the facts giving rise to this reference are that the petitioner-firm, Messrs. Mahavir Metal Works, Kapurthala, is engaged in the manufacture and sale of aluminium utensils with its head office at Kapurthala. This firm, apart from its branch at Delhi, had another branch at Trivandrum under the style of Kolpunj Enterprises wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal taking note of the surrender of the amount of Rs. 35,000 as the assessee's income from undisclosed sources came to the conclusion that the penalty was exigible. It is on these facts that the following question of law has been referred for our opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the penalty was exigible under section 271(1)(c) ? " After hearing the learned counsel for the parties I am of the opinion that this question must be answered in the affirmative and in favour of the revenue. It is well-settled by now that the penalty proceedings are of a penal nature and it is for the department to establish that the assessee was guilty of concealment of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm itself showed this amount as its income and it was in view of this admission of the assessee that the amount in question was assessed as income of the assessee from undisclosed sources. It was a different matter if the assessee during the course of the assessment proceedings would have failed to prove the explanation given by him about this amount having been taken as a loan from three parties and the Income-tax Officer might have recorded a finding that the explanation furnished by the assessee was not proved. In that case, during the subsequent penalty proceedings, it was incumbent upon the income-tax authorities to have discharged its onus by leading evidence to show that the undisclosed amount was the income of the assessee and once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as his income by filing a revised return and having failed to prove during the course of the penalty proceedings that the explanation furnished by him earlier that the said amount was a loan was correct. In I.T.R. No. 35 of 1971 (Jawahar Woollen Textile Mills v. Commissioner of Income-tax) decided on January 17, 1972, a Division Bench of this court, in more or less similar circumstances, came to the conclusion that the decision in Anwar Ali's case was not applicable and it was found that there was material on the record on which the Inspecting Assistant Commissioner and the Tribunal came to the conclusion that there was concealment of the income. The Delhi High Court in Durga Timber Works v. Commissioner of Income-tax also took the same vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts. Similarly, a case in Gumani Ram Siri Ram v. Commissioner of Income-tax relied upon by the learned counsel for the petitioner, is not applicable to the facts of the present case. In that case, no doubt, the assessee did not furnish any explanation for the amount in question and he surrendered the amount for the purposes of the tax, but he did not make any statement that the amount in question was his income. This statement of fact was specifically noted by the Bench during the course of the judgment when it was stated as follows : " In the present case the assessee furnished no explanation for the cash credit entries of Rs. 12,000. He surrended this amount for the purpose of tax. But he made no statement that this amount was his in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , contended before the Bench that the penalty proceedings being penal in nature, the assessee was entitled to an opportunity to prove that the amount in question was not his income and he was entitled to explain away his admission which he made during the course of the assessment proceedings. The Bench came to the conclusion that the assessee had demanded such an opportunity but the same was not afforded and it was held as follows: "It is an established principle of law that a party is entitled to show and prove that an admission made by him previously is in fact not correct and true. In the instant case the assessee had definitely alleged that the amounts surrendered were not in fact his undisclosed income, that the hundis in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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