9911796707
TMI Blog2004 (10) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... nation to section 271(1)(c) were attracted to the case -Tribunal was justified in levying the penalty - - - - - Dated:- 29-10-2004 - Judge(s) : R. K. AGRAWAL., PRAKASH KRISHNA. JUDGMENT The judgment of the court was delivered by R.K. AGRAWAL J.- The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for opinion to this court: "Whether, on the facts and circumstances of the case, was the Tribunal legally right in holding that the provisions of the Explanation to section 271(1)(c) were attracted to the case?" Briefly stated, the facts giving rise to the present reference are as follows: The reference relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax (Appeals) deleted the imposition of penalty. The Revenue feeling aggrieved preferred the appeal before the Tribunal. The Tribunal has allowed the appeal. We have heard Sri Vikram Gulati, learned counsel for the applicant, and Sri A.N. Mahajan, learned standing counsel appearing for the Revenue. Learned counsel for the applicant submitted that the item of Rs. 51,314.74 was entered twice in the purchase account on account of some error but it did not reflect on the profits of the firm. According to him there was neither any gross and wilful neglect on the part of the assessee nor any fraud was committed by the applicant. Therefore, the penalty was not exigible. In support of his aforesaid plea, he relied upon the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this sub-section." Prior to the aforesaid amendment made by the Finance Act, 1964, the apex court in the cases of Anwar Ali [1970] 76 TR 696 and Khoday Eswarsa and Sons [1972] 83 ITR 369 has held that the burden is on the Department to prove that a particular amount is a revenue receipt. It would be perfectly legitimate to say that the mere fact that the explanation of the assessee is false does not necessarily give rise to the inference that the disputed amount represents income and it cannot be said that the finding in the assessment proceedings for determining or computing the tax is conclusive. It is only a good evidence. Before the penalty can be imposed, the entirety of circumstances must reasonably point to the conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of the Explanation to section 271 in the notice under section 271 is necessary before the provisions of the Explanation are applied. Reliance was placed by learned counsel for the applicant on the following decisions: (1) CIT v. Anwar Ali [1970] 76 ITR 696 (SC); (2) CIT v. Khoday Eswarsa and Sons [1972] 83 ITR 369 (SC); (3) CIT v. S. Devendra Singh [1977] 108 ITR 314 (All); and (4) Addl. CIT v. Chatur Singh Taragi [1978] 111 ITR 849 (All) is also misplaced. In the case of S. Devendra Singh [1977] 108 ITR 314, this court has held 12 that the fact that the Explanation was applicable made no difference. It only raises a presumption which is rebuttable and shifts burden of proof from the Department to the assessee. But when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal that the assessee was not guilty of gross or willful oversight and the penalty was not exigible. It may be mentioned here that the Explanation to section 271(1)(c) of the Act clearly attracted in the present case inasmuch as the assessed income was more than 80 per cent, of the returned income being Rs. 1,63,850 as against the returned income Rs. 71,870. The onus was on the applicant which it had failed to discharge as no explanation whatsoever was given by it before the Assessing Officer. Moreover, the Tribunal has recorded a clear finding that by debiting the amount of purchase of goods at Rs. 51,314.74 twice, the profits have been reduced. In view of the foregoing discussion, we are of the considered opinion that the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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