9911796707
TMI Blog1991 (9) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent is the Revenue. We are concerned with the assessment year 1975-76, for which, the accounting period ended on March 31, 1975. The assessee was carrying on the business of money-lending with effect from December, 1973. His residence-cum-business place was raided on December 17, 1974. The said disclosed an excess cash balance with the assessee in the sum of Rs. 63,853.54. A sum of Rs. 35,000 was seized by the Department. Proceedings were initiated against the assessee under section 132 of the Income-tax Act, 1961. The Income-tax Officer passed an order, under section 132(5) of the Act, dated March 14, 1975. In the said proceedings, the assessee explained the source for the funds. He stated that his mother-in-law, Smt. Ammakunju, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Commissioner accepted that a sum of Rs. 15,000 from Dr. Natarajan, brother-in-law of the assessee, and a sum of Rs. 5,000 from Ammakunju (mother-in-law of the assessee) were properly explained, as belonging to them. In the further appeal before the Tribunal, the quantum fixed by the Appellate Assistant Commissioner was confirmed. The Tribunal referred to the earlier statement given by the assessee to the Income-tax Officer on December 17, 1974, and the later sworn statement dated February 28, 1975, as also the affidavits and statements filed by near relations and held that there are discrepancies and the quantum fixed by the Appellate Assistant Commissioner does not require interference. The Tribunal noticed a deposit made in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessment proceedings, the non-declaration of the disputed income was based on a false explanation which amounts to fraud in terms of the Explanation to section 271(1)(c) of the Act as it stood at the relevant time. In other words, the Tribunal held that the Income-tax Officer was aware even before the returns were filed by the assessee about the amounts unearthed during the raid and the non-inclusion of the said amount in the return was consistent with the stand taken by the assessee in proceedings under section 132 and the assessment proceedings. Since the non-inclusion of the said income is due to a false explanation which amounts to fraud in terms of the Explanation to section 271(1)(c) of the Act, penalty under section 271(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the returns. The assessment was completed on March 31, 1976. In proceedings under section 132(5) of the Income-tax Act, 1961, by order dated March 14, 1975, the Income-tax Officer held that the explanation offered by the assessee for the source of the funds is not satisfactory. On this basis, the sum of Rs. 65,656 was held to represent the assessee's income from undisclosed sources. Similarly, in the assessment proceedings, the source pointed out by the assessee for the funds was disbelieved and the income was added. Only in appeal, the Appellate Assistant Commissioner accepted the source to the extent of Rs. 20,000. This was affirmed in the quantum assessment appeal by the Tribunal. The main source for the funds was the amount obtained fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true that, in the order dated March 14, 1975, passed under section 132(5) of the Income-tax Act, 1961, the Income-tax Officer held that the assessee has no satisfactory explanation for the source of the funds and so the sum of Rs. 65,656 represented the assessee's income from undisclosed sources. If the order stood thus, and thus far only, it may be case where the addition made was due to non-acceptance of the explanation or the unsatisfactory nature of the explanation offered by the assessee for the source of the funds. But that is not the case here. In the penalty proceedings, after referring to the various earlier proceedings and the statements of the assessee at different stages, the Tribunal has entered a finding of fact that the expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot so shown, the assessee will 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. In this case, the Tribunal has categorically found that the explanation offered by the assessee is false. The non-declaration is based on such false explanation. This amounts to a fraud in terms of the Explanation to section 271(1)(c) of the Act. The finding that the explanation offered by the assessee is false and that it amounts to a fraud is a finding of fact. It is not the case of the assessee that the said finding is based on no material or is otherwise perverse or irrational. The said finding is not challenged by framing an appropriate question in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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