9911796707
TMI Blog1991 (6) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings, the Income-tax Officer noticed cash credits in the names of 28 different parties. On scrutiny, the Income-tax Officer did not accept these cash credits as genuine and assessed the sum of Rs. 2,62,000 being the overall peak credit of the entire transactions as the assessee's income from undisclosed sources. Simultaneously, he disallowed the interest of Rs. 40,404 claimed to have been paid to the creditors. These additions were upheld on appeal by the Appellate Assistant Commissioner. For such concealment of income, proceedings under section 271(1)(c) were initiated. But, in spite of the service of notice, the assessee did not attend the hearing of the penalty proceedings. The Inspecting Assistant Commissioner was of the opinion that the Explanation to section 271(1)(c) as introduced with effect from April 1, 1964, applied as the return was filed after the said date. As the assessee failed to discharge the onus reposed on him, the Inspecting Assistant Commissioner was of the opinion that the assessee had concealed the income added by the Income-tax Officer. He noticed that the tax sought to be evaded was Rs. 1,47,600. As such, he imposed a penalty of Rs. 73,80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 404 becomes final. In accordance with the direction of the High Court, the Tribunal heard the appeal against the penalty order. By an application dated April 4, 1988, the assessee prayed that the Tribunal may be pleased to remand the case and pass an order which it thinks fit and proper ". Submissions were made to that effect by the authorised representative for the assessee. But these submissions were strongly opposed by the Departmental representative. The Tribunal disposed of the appeal after observing as follows: " We have considered the submissions of the authorised representatives for the parties and examined the materials on record and the facts and circumstances of the case. There is no manner of doubt that the amounts of Rs. 2,62,000 and Rs. 40,404, addition and disallowance of which have become final up to the stage of the Hon'ble High Court, were concealed by the assessee in view of the Explanation to section 271(1)(c) The assessee did riot adduce any evidence to show that the concealment was not due to any fraud, gross or wilful neglect on its part. As such, the Inspecting Assistant Commissioner was justified in drawing the presumption in accordance with the Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s matter was disposed of by this court on August 9, 1982. The Tribunal observed in it's order as follows : " More than five years thereafter since the said decision the Tribunal took up the matter and fixed hearing on October 19, 1987, on which date the assessee prayed for time on the ground that it was necessary in the interest of justice to adduce relevant evidence for a fresh decision of the Tribunal and the records of the assessee relating to 25 years back were misplaced and required time for getting at them. " In the assessee's application, the Tribunal has nowhere dealt with the question why the matter was taken up for hearing after a lapse of five years. In the application dated April 4, 1989, made by the assessee for time, the assessee said that the factory as well as the registered office of the assessee remained closed on November 7, 1987, due to acute labour trouble and lock-out. It has also brought on record the fact that the assessee was not in a position to adduce evidence before the Tribunal. One of such reasons was that the factory and the office were under lock-out due to labour trouble and, accordingly, the assessee could not produce the evidence before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner had already disposed of the matter after giving an opportunity to the assessee and the assessee did not avail of such opportunity and, thereafter, on the basis of presumption, he levied penalty and as such the assessee was not entitled to any further opportunity before the Tribunal after the matter was remanded to the Tribunal. It is true that the Tribunal does not impose the penalty but the Tribunal was directed to consider the facts and circumstances of the case for the purpose of finding out whether the penalty was imposable on those facts. In other words, it was the duty of the Tribunal to bring on record the relevant facts on the basis whereof it could be said that the assessee failed to discharge the onus that lay on it under the Explanation. In Orissa Corporation Pvt. Ltd. [1986] 159 ITR 78 (SC), the case which was cited before the Tribunal and which the Tribunal did not discuss at all, the Supreme Court held that, in this case, before the Supreme Court, the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the files of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no fraud or any gross or wilful neglect on his part, the legal fiction will come into play and the Department will be entitled to impose penalty on the strength of the deeming clause without any further ado. No hard and fast rule can be laid down about the quantum of evidence that the assessee will have to produce in order to establish that there was no fraud or any gross or wilful neglect on his part. This can be done from the materials already on record in the assessment proceedings. This can also be done by producing other evidence. It is a question of fact in every case. If the assessee is able to discharge the onus that has been imposed upon him by the Explanation of proving that there was no fraud or gross or wilful neglect on his part, the deeming clause of concealment will not come into operation. If the authority concerned is satisfied that the assessee has been able to prove that there was no fraud or gross or wilful neglect on his part, there cannot be any question of imposition of any penalty. In my judgment, in a case where the Explanation applies, there is no scope for invoking the principles laid down by the Supreme Court in the case of Anwar Ali [1970] 76 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be gone into by the Tribunal. But the Tribunal thought, as would appear from the order which we have already extracted, that, in view of the fact that none appeared for the assessee in the reference before this court, all the questions were not, in that sense, pressed and the court declined to answer the questions. Therefore, the finding in the assessment proceedings became final. It is now well-settled that tile finding in the assessment proceedings is no doubt a cogent evidence but it is not the only evidence on which one can proceed. We need not go into that question in this reference. We feel, on the facts and in the circumstances of this case, that because of the delay in taking up the matter, the assessee was denied a reasonable opportunity of hearing and the Tribunal failed to bring on record necessary facts and circumstances as directed by this court in the case of the assessee in Income-tax Reference No. 20 of 1973 (Sikri and Co. (P.) Ltd. v. CIT and CIT v. Sikri and Co. (P.) Ltd.). We are of the view that a further opportunity has to be given to the assessee to show whether there was any gross or wilful neglect on the part of the assessee in not returning the correct in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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