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TMI Blog1996 (11) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ommitted any fraud or gross or wilful neglect ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in : (a) not holding that the assessee had concealed the particulars of his income by not producing the books of account ; and (b) not upholding the penalty imposed by the Inspecting Assistant Commissioner ? " For the assessment year 1967-68, relevant to the accounting period ending March 31, 1967, the assessee filed its return of income on August 24, 1971, declaring a total income of Rs. 17,180. Claiming a brought forward loss of Rs. 70,172 against the above income, a net loss of Rs. 52,992 was declared by the assessee. The Income-tax Officer required the assessee to produce it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee went in appeal before the Tribunal. After hearing both the parties and after going through the record, the Tribunal cancelled the penalty of Rs. 70,000 imposed by the Inspecting Assistant Commissioner under section 271(1)(c) of the Act. It was held by the Tribunal that the assessment in this case was completed under section 144 on an estimated income of Rs. 50,000 on account of the failure on the part of the assessee to produce its books of account for examination before the Income-tax Officer, and there being no evidence to show that there was any positive concealment on the part of the assessee, the penalty imposed under the Explanation to section 271(1)(c) of the Act was not sustainable as there was no element of mens rea or conscio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in CIT v. Mussadilal Ram Bharose [1987] 165 ITR 14 and Chuharmal v. CIT [1988] 172 ITR 250, argued that the Explanation to section 271(1)(c) of the Act added by the Finance Act of 1964, creates a rebuttable presumption of law to the effect that where the total income returned by the assessee is less than 80 per cent. of his total assessed income, he shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purpose of section 271(1)(c) of the Act 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. The Explanation, thus shifts the burden to the assessee in the situation covered by it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If the difference between the returned income as against the income assessed by the Department is more than 20 per cent., the provisions of the Explanation become at once applicable with the resultant attraction of the presumption against such an assessee regarding the concealment of the income. The presumption raised is rebuttable which the assessee can either discharge by rendering an explanation that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, or by the existing material on record in a specific case. In the case in hand, the returned income being less than 80 per cent. of the assessed income, the provisions of the Explanation became at once applicable with the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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