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TMI Blog1992 (9) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... brick-kiln business. The assessment was completed on a total income of Rs. 12,000. During the assessment proceedings for the assessment year 1975-76, the statement on oath of Azimullah, partner of the assessee-firm, was recorded. He admitted that he had valued the closing stock at the market rate of Rs. 32,901. A perusal of the accounts revealed that the value of bricks numbering 2,90,000, which were inside the kiln, had not been taken into consideration by the assessee. In that case, the valuation of the closing stock would be Rs. 55,026 and, as such, there was an escapement from income of Rs. 22,135. Accordingly, action was taken under section 148 of the Act and assessment was completed on total income of Rs. 24,320 on October 7, 1978. Notice was issued to the assessee under section 271(1)(c) of the Act to show cause why penalty be not imposed on him. The assessee did not file any written reply. The Income-tax Officer took the view that the provisions of section 271(1)(c) were attracted and the minimum penalty payable was Rs. 22,330 and the maximum penalty payable would be Rs. 44,660. So he imposed a penalty of Rs. 22,330 on the assessee. The assessee preferred an appeal against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome during the year under consideration. The Tribunal also held that the assessee did not offer any explanation in response to the notice issued by the Income-tax Officer under section 971(1)(c) of the Act. Thus, the Tribunal came to the conclusion that the Income-tax Officer was right in levying the penalty and the Appellate Assistant Commissioner had committed an error in cancelling the same. The appeal was allowed and the order of the Income-tax Officer imposing penalty was restored. Learned counsel for the Department has raised a preliminary objection that the reference is not legally maintainable since the questions which have been referred by the Tribunal are questions of fact. In Sree Meenakshi Mills Ltd. v. CIT [1957] 31 ITR 28 (SC), to which our attention has been drawn by learned counsel, various authorities on the subject were reviewed and the position that emerged from the authorities was summed up as follows : (1) When the point for determination is a pure question of law such as construction of a statute or document of title, the decision of the Tribunal is open to reference to the court. (2) When the point for determination is a mixed question of law and fact, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd accepted the quantum of tax which was assessed on the basis that the value of the bricks in the kiln had not been shown in the return and the correct income was not disclosed. It is implicit in the conduct of the assessee, it was so contended, that he had concealed particulars of his income and so penalty was rightly imposed under section 271(1)(c) on him. Now, penalty may be imposed on an assessee under section 271(1)(c) if the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceeding under the Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. In 1964, an Explanation was added to sub-section (1) of section 271 which, in so far as it is material for the purposes of this case, provides that 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. In 1976, the Explanation was again amended and this amendment came i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufficient evidence to raise a presumption in his favour. The evidence required to shift the burden need not necessarily be direct evidence, that is, oral or documentary evidence or admissions made by the opposite party, it may comprise circumstantial evidence or presumption of law or fact ... Briefly stated, the burden of proof may be shifted by presumptions of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or by circumstantial evidence but also by presumptions of law or fact." Both the Income-tax Officer and the Appellate Tribunal have taken the view in the present case that the assessee has concealed the income during the year under consideration. This view has been taken on the basis, that the value of the bricks numbering 2,90,600 which were inside the kiln were not shown by the assessee in the return. It has been found by the Appellate Assistant Commissioner that the assessee had shown the closing stock of the bricks in the kiln and had also fully declared the sales of the closing stock of the bricks in the kiln brought forward as opening stock in the subsequent year. The Appellate Tribunal has not interfered with these findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chagla C. J. in CIT v. Gokuldas Harivallabhdas [1958] 34 ITR 98 (Bom) was approved, viz., that the gist of the evidence under section 28(1)(c) is that the assessee has concealed the particulars of his income or has deliberately furnished inaccurate particulars of such income and, therefore, the Department must establish that the receipt of the amount in dispute constitutes income of the assessee. If there is no evidence on record, except the explanation given by the assessee, which explanation has been found to be false, it does not follow that the receipt constitutes his taxable income: The decision in Anwar Ali's case [1970] 76 ITR 696 (SC) was followed by the Supreme Court in CIT v. N. A. Mohamed Haneef [1972] 83 ITR 215. There is clear authority in D. M. Dahanukar v. CIT [1967] 65 ITR 280 (Bom) also. The view taken was that mere omission will not amount to concealment or deliberate furnishing of inaccurate particulars unless the omission is attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. We have accordingly come to the conclusion that, on the facts and circumstances of this case, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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