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TMI Blog2005 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... tting aside the penalty imposed with regard to the unaccounted value of tin sheets and tin containers - - - - - Dated:- 18-5-2005 - Judge(s) : J. B. KOSHY., K. T. SANKARAN. JUDGMENT The judgment of the court was delivered by J.B. Koshy J.- The questions of law raised in this appeal by the appellant are the following: "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that no penalty could be levied in respect of the two amounts totaling Rs. 1,92,341? 2. Whether, on the facts and in the circumstances of the case and in the absence of a finding of bona fide in the absence of findings (or consideration) contemplated under Explanation 1(B) to section 271(1)(c), the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash book and also investment in unaccounted purchase of tin sheets and tin containers. The following were added: Rs. "(i) Inflation of cash balance in cash book 30,802 (ii) Investment in unaccounted purchase of tin sheets 1,62,393 (iii) Unaccounted purchase of tin containers 29,948" The assessment became complete. The explanation offered by the assessee regarding movement of goods from the firm run in the same premises, etc., was not accepted. The Assessing Officer also levied penalty under section 271(1)(c) amounting to Rs. 1,20,000. That was affirmed by the Commissioner. However, the Tribunal set aside the penalty imposed on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the addition of the Explanation to section 271(1)(c) of the Income-tax Act, 1961, conscious concealment is necessary and the presumption under the Explanation to section 271(1)(c) can be displaced by the assessee proving that the failure to return the correct income did not arise from any fraud or gross or wilful neglect and the quantum of proof necessary would be that required in a civil case, namely, preponderance of probabilities.' True, the assessee could not prove with the books of account of M/s. Sastha Enterprises that he had received on loan tin sheets and tins from that concern. Even if the amounts representing as the cost of investments in sheets and tins could be assessed as the income of the assessee, can it be said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,-... (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income: Provided that, if in a case falling under clause (c), the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished exceeds a sum of twenty-five thousand rupees, the Income-tax Officer shall not issue any dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. The Tribunal did not find that the initial burden was discharged. Paragraph 9 of the order of the Tribunal shows that relying on the Full Bench decision, the Tribunal found that the Department was not able to prove that the explanation offered by the assessee is not correct. The observation of the Tribunal regarding initial burden to prove is against the provisions of section 271(1)(c) as amended. In Deputy CIT v. K. Suresh Kumar [2002] 253 ITR 640, a Division Bench of this court also held that the initial burden is on the assessee to prove that the explanation offered is bona fide. Here the Tribunal erroneously casts the burden on the Department, whereas there is no finding that the initial burden was discharged by the assessee. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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