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TMI Blog2004 (10) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... pecting Assistant Commissioner of Income-tax in terms of the proviso to section 271(1)(c)(iii) of the income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in confirming the penalty on the ground of concealment of Rs. 15,000 under section 271(1)(c) of the Income-tax Act, 1961 when the Income-tax Officer and the Commissioner of Income-tax (Appeals) had applied the provisions of the Explanation to section 271(1)(c) of the above Act?" Briefly stated the facts giving rise to the present reference are as follows: The applicant is a lady and has been assessed to income-tax in the status of an individual. The present reference relates to the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The applicant claimed that the valuation given by the valuer, he had estimated the cost of construction of the property at an excessive amount and according to her the investment in the construction was only Rs. 35,000 and filed a revised return on February 2, 1976 declaring an income of Rs. 15,000 from other sources. In part III of the return she had disclosed that she had a sum of Rs. 4,726 out of home chest. The Income-tax Officer completed the assessment treating the investment in the construction at Rs. 50,028. He accepted the source to the extent of Rs. 22,690 and assessed the balance of Rs. 27,370 as her income. He also initiated penalty proceedings under section 271(1)(c) of the Act. The applicant in her reply submitted that she had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structions under section 119(3) of the Act. We have heard Sri Vikram Gulati, learned counsel for the applicant and Sri A.N. Mahajan, learned standing counsel appearing for the Revenue. It may be mentioned here that it is not the case of the applicant that the penalty under section 271(1)(c) of the Act has been imposed by the Income-tax Officer on the directions/dictates of the Inspecting Assistant Commissioner and he had not applied his independent mind or discretion in the case. It is not necessary for us to go into the question as to whether the penalty order has been passed after getting the approval from the Inspecting Assistant Commissioner or not inasmuch as we find that the Income-tax Officer while imposing the penalty had applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section." Prior to the aforesaid amendment made by the Finance Act, 1964, the apex court in the cases of CIT v. Anwar Ali [1970] 76 ITR 696 and CIT v. Khoday Eswarsa and Sons [1972] 83 ITR 369 has held that the burden is on the Department to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions thereof are to be used against him. These provisions include the Explanation. By virtue of the notice under section 271 the assessee is put to notice that, if he does not prove, in the circumstances stated in the Explanation, that his failure to return his correct income was not due to fraud 01 neglect, he shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars thereof, and, consequently be liable to the penalty under the section. No express invocation of the Explanation to section 271 in the notice under section 271 is necessary before the provisions of the Explanation are applied. Reliance placed by learned counsel for the applicant on the following decisions: (1) CIT v. S. Devendra Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additions were called for. The Tribunal had held that the charge of concealment could not be said to have been established where the Tribunal had found, having regard to the facts and circumstances of the case, the difference between the assessed and the returned income was not due to gross or wilful neglect on the part of the assessee as there was ample material for the finding of the Tribunal that the assessee was not guilty of gross or wilful oversight and the penalty was not exigible. It may be mentioned here that the applicant cannot get any advantage or benefit of the revised return filed by her inasmuch as the original return, which was filed, was neither under section 139(2) nor under section 139(1) but was a return filed under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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