9911796707
TMI Blog1991 (10) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee firm consisted of three partners, namely, Shri Devendra Kumar, Shri Mool Chand and Smt. Keval Devi. It used to carry on the business of manufacturing sized beams. According to the application, the firm awarded sole selling agency for selling sized beams produced by it to M/s. Luhadia Brothers, a proprietary concern of Smt. Ratan Devi, who was the wife of one of the partners, Shri Davendra Kumar. Smt. Ratan Devi used to carry on her business of sales through an expert person, namely, Shri Madanlal Sethi, who happened to be her sister's son. Shri Nirmal Kumar, son of Smt. Ratan Devi, also assisted her in the business. The assessee-firm claimed before the Income-tax Officer that it had paid the following commission to M/s. Luhadia Brothers : Rs. 13,919 for 1967-68 Rs. 19,811 for 1971-72 Rs. 13,712 for 1972-73 Rs. 3,946 for 1973-74 Rs. 15,844 for 1974-75 Rs. 2,552 for 1975-76 According to the assessee, the Income-tax Officer did not make full inquiry and he did not take the material evidence of Shri Madanlal Sethi and Shri Nirmal Kumar. Nevertheless, he disallowed the gross amount of commission paid to Smt. Ratan Devi holding her to be the benamidar of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was wrong in coming to the conclusion that there was no conscious disregard of the law. The Tribunal came to the conclusion that there is more than sufficient evidence, which leads it to believe that this is a fit case for penalty as the assessee has furnished inaccurate particulars of its income. On that premise, the Tribunal allowed the appeals of the Revenue, but, at the same time, it directed the Income-tax Officer to recompute the penalty on the net addition made to the income of the assessee on account of bogus claim of commission. The assessee-firm, thereafter, filed applications under section 256(1) of the Act and, as mentioned hereinabove, the Tribunal has dismissed these applications, vide its order dated August 23, 1988. In refusing to make reference, the Tribunal observed that Smt. Ratan Devi was a benamidar of the assessee-firm. The Tribunal proceeded to observe that whether there was concealment or not is a finding of fact and the Tribunal found this fact in the quantum appeal of the assessee as well as in his penalty appeal that Smt. Ratan Devi was a benamidar of the assessee and the assessee has shown payments of commission to Smt. Ratan Devi, which was not genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the provisions of section 28 of the Indian Incometax Act, 1922, which are pari materia with the provisions contained in section 271(1)(c) of the Act. Their Lordships of the Supreme Court held as under (headnote): "Proceedings under section 28 of the Indian Income-tax Act, 1922, are penal in character. The gist of the offence under section 28(1)(c) is that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income and the burden is on the Department to establish that the receipt of the amount in dispute constitutes income of the assessee. If there is no evidence on the 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.. It would be perfectly legitimate to say that the mere fact that the explanation of the assessee is false does not necessarily give rise to the inference that the disputed amount represents income. It cannot be said that the finding given in the assessment proceedings for determining or computing the tax is conclusive. However, it is good evidence. Before penalty can be imposed the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Act, 1961, as soon as it is found that there was a difference of more than 20% between the income returned and the income assessed, clause (c) comes into operation by the rule of presumption engrafted in the Explanation and it is for the assessee to prove that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. If he succeeds in discharging that onus, no penalty can be imposed under section 271(1)(c). When a case is covered by the Explanation, then, on the failure of the assessee to discharge the onus of proving absence of certain ingredients, the rule of presumption not only covers the matter of conscious concealment or furnishing inaccurate particulars on the part of the assessee, but on a plain and grammatical meaning of the provision, it also ropes in the presumption of the assessed income being that of the assessee. It is difficult to bifurcate the rule of presumption into two and say that it only affects the first part and not the second. If the Explanation is not attracted, then the onus to prove all the ingredients which are required to be proved even under the amended law is on the Department, including th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icient to impose penalty. The burden is on the Revenue to prove deliberate concealment or furnishing of wrong particulars by the assessee. In Addl. CIT v. Gokal Chand Jagan Nath [1986] 157 ITR 187, a Division Bench of the Delhi High Court also held that failure to disclose a particular income as the assessee's income does not amount to concealment. Shri Singhal, learned counsel for the Revenue, has referred to number of decisions to which we may briefly advert. In Rai Bahadur Mohan Singh Oberoi v. CIT [1973] 88 ITR 53, their Lordships of the Supreme Court held that the finding that the purchase was benami and that the dividends from the benami purchase of shares were to be included in the assessable income of the assessee constituted a question of fact which did not call for interference by the High Court. A similar view has been expressed in CIT v. Shri Ram Niwas [1984] 149 ITR 403 (Raj) and Parasmal Kanaji v. CIT [1988] 172 ITR 568 (Raj). In Smt. Gulab Sundari Bai Bapna v. CIT[1981] 132 ITR 887, a Division Bench of this court held that when a decision of the Tribunal was based not merely on the doctrine relating to burden of proof, but on the totality of the facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X
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