9911796707
Advanced Search 
TMI Blog2001 (9) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... uired by indulging in purchase and sale of contraband gold. The said amount was handed over to the income-tax authorities under section 132A of the Income-tax Act, 1961, for taking proceedings in that regard under the Income-tax Act. This led to assessment of the said sum in the hands of the assessee by rejecting his explanation by invoking the deeming provisions under section 69A of the Act of 1961 by treating the assessee to be an owner of the amount found in his possession and the same having not been explained, to be the income of the assessee of the previous year during which he was found to be in possession of the said amount. The additions made of Rs. 2,30,000 in the income of the assessee over and above that returned by the assessee in pursuance of notice led to initiation of proceedings under section 271(1)(c) for levying penalty for concealment of the particulars of the income by the assessee. The assessee furnished the explanation that the said amount of Rs. 2,30,000 represented the amount given to him by some third parties, which has also been confirmed by the third parties named by the assessee. However, the assessing authority rejected the said explanation, in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order found that none of the five persons were in a position to advance the stated sum respectively. It was found that each one of the lenders in his turn stated that he has borrowed money from others. Radhey Shyam was alleged to have lent Rs. 80,000. He in turn is stated to have arranged Rs. 70,000 from others. Shankar Lal Soni had arranged Rs. 50,000 from others out of Rs. 60,000 attributed to him. Likewise Shri Bhanwarlal Soni shifted his source to others for Rs. 37,000 out of Rs. 40,000 attributed to him and Shri Bhagirath Soni arranged entire Rs. 30,000 from others. In most of the cases the lenders to these respective persons as named by them have not supported the story. The assessing authority noticed further different stand taken by these lenders before the Customs authorities and the income-tax authorities. He also examined the financial status of each of the lenders and persons from whom the so-called lenders of money to the assessee have stated to have arranged money and found them of petty means, hardly in a position to lend any money. The assessing authority has noticed that though the assessee has later on retracted his admission, his companion Jugal Kishore, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was in force during the relevant assessment year in question. The relevant provisions of the Act for the present purposes read as under: "271. Failure to furnish returns, comply with notices, concealment of income, etc.--(1) If the Assessing Officer or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person--... (c) has concealed the particulars of his income or furnished 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 three times 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. Explanation 1.--Where in respect of any facts material to the computation of the total income of any person under this Act,-- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) to be false, or (B) such person offers an explanation which he is not able to subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or disallowed in computation is deemed to represent the income in respect of which particulars have been concealed. Clause (B) comes into the picture only when some explanation is furnished by the assessee. It does not come into the picture where the assessee does not furnish any explanation; because such a case is governed by clause (A). Clause (B) comes into operation, where the explanation furnished by the assessee in respect of the additions or disallowance of any amount, he is un able to substantiate the same that is to say where the explanation furnished by the assessee is placed in the category of a fact "not proved", which denotes that the fact in enquiry is neither proved nor disproved. This "not proved" state by itself can invite the operation of the Explanation. If in addition to failure to substantiate the explanation, the assessee also fails to prove that the explanation furnished by him was-bona fide, and that he has disclosed all material facts necessary for assessment then Explanation 1 operates. The distinction must be noticed that where the proceedings are initiated on the basis of certain deemed provision which gives rise to a rebuttable presumption which can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (A) or clause (B) come into existence. It does not depend on the option of the assessing authority to invoke by specific mention to reach the conclusion envisaged by law once the conditions mentioned in clause (A) or clause (B) of the Explanation 1 to section 271(1)(c) are established. In these circumstances, the question whether specific notice of intention to invoke the Explanation was necessary, in our opinion, does not arise as a substantial question of law, in as much as reading of the provision itself makes abundantly clear that no other conclusion is possible. The answer is obvious. In view of the finding reached by the Revenue in penalty proceedings independently about not furnishing of explanation by the assessee in penalty proceedings and explanation on record to be false, the Explanation springs to life in the penalty proceedings. Therefore, levying of penalty, in our opinion, has rightly been upheld by the Tribunal. The answer being self-evident and primarily being dependent on appreciation of evidence, no substantial question of law arises in the facts and circumstances of this appeal for consideration of this court. Accordingly, the appeal fails and is he ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
