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TMI Blog1987 (4) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT [1987] 167 ITR 628 (AP). Answered accordingly. We shall, therefore, state the facts in so far as they are relevant to the first question. The assessee is an individual carrying on money-lending business. The assessment year concerned is 1970-71 Assessment was made for this assessment year on February 4, 1971, on a total income of Rs. 71,400. In view of the material brought to light during the survey of the assessee's premises some time in October, 1970, by the departmental authorities, the assessments were reopened for the assessment years 1967-68 to 1970-71 under section 147(a) of the Act. In the course of survey operations, the departmental authorities came across a number of bank pass books standing in the names of the wife and children of the assessee, including his married daughter. They disclosed several deposits made on different dates, in different years, in their names. During the reassessment proceedings, the Income-tax Officer called upon the assessee to state why the bank deposits in the accounts of his wife and children should not be treated as his income from undisclosed sources. The explanation offered by the assessee was that the said amounts represented gif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of penalty proceedings. I would, therefore, levy a minimum penalty of Rs. 21,731 (Rupees twenty-one thousand seven hundred and thirty-one only) and direct the Income-tax Officer to issue demand notice and challan for the said amount and collect the same..." The order of the Inspecting Assistant Commissioner was challenged by the assessee by way of an appeal before the Income-tax Appellate Tribunal. The Tribunal referred to the relevant provisions of law and a decision of the Gujarat High Court and observed : " In the present case, the explanation given by the assessee is corroborated by the statements of his wife and children recorded by the Income-tax Officer in the assessment proceedings. The Department has not brought on record any positive evidence to contradict the testimony of the assessee, his wife and children. It may be that in the assessment proceedings the testimony of the wife and children of the assessee is not considered sufficient to discharge the burden of proof cast upon the assessee under section 69. But, in penalty proceedings, their evidence is sufficient, in our opinion, for holding that the presumption enacted in the Explanation under section 271( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finding of the Tribunal that the assessee has discharged the burden of proof placed upon him by the Explanation to section 271(1)(c), cannot be gone into by us in this reference. We must say that it is not possible to agree with the said submission. Question No. 2 as referred does take in question No. 1. If question No. is not held to be implicit within question No. 2 and both are treated as distinct and independent questions, then the referring of question No. 2 alone becomes wholly meaningless and an exercise in futility. Once the finding of the Tribunal referred to in question No. 1 (of the two questions which were asked to be referred by the Department) is taken as final, there is no point in going into question No. 2 ; its answer can be only one way, i.e., in the affirmative in favour of the assessee and against the Revenue. We do not think that the Tribunal would have indulged in such an exercise in futility, though some of its observations in the statement of case tend to support the contention of Sri Ratnakar. To make the questions referred to us meaningful and applying the test of reasonable interpretation to the order of the Tribunal, we are inclined to hold that ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year concerned therein was 1967-68. (It may be noticed that the Explanation we are now considering was introduced by the Finance Act, 1964, with effect from April 1, 1964). The Full Bench held: once the income returned is less than 80% of the assessed income, the Explanation applies and two presumptions follow therefrom, viz., (a) that the amount of assessed income is the correct income and is in fact the income of the assessee ; and (b) that the failure of the assessee to return the correct assessed income was due to fraud or gross or wilful neglect on the part of the assessee ; the presumptions raised by the Explanation are not conclusive but are rebuttable; the initial burden of discharging the onus of rebuttal lies upon the assessee; once the initial burden is discharged, the assessee would be out of the mischief of the Explanation until and unless the Revenue is able to establish that the assessee in fact concealed the particulars of his income or furnished inaccurate particulars thereof ; if the assessee fails to discharge the said onus, penalty can be levied straightaway without anything further. In case, however, he discharges the said initial burden, the onus shifts to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the penalty proceedings as he might have chosen. The assessee did not choose to produce any fresh material or evidence in the penalty proceedings, Indeed, his representative did not even participate in the proceedings. On both the dates of hearing fixed, he merely sent an application for adjournment. His application on the second date of hearing was refused and the said refusal has been held to be justified and proper by the Tribunal, which finding is not open or canvassed before its. Therefore, the only material before the Inspecting Assistant Commissioner was the material which was adduced by the assessee during the assessment proceedings. In those proceedings, the statements of the wife and daughters of the assessee were recorded. Those statements were disbelieved by the Income-tax Officer and the deposits were added to the assessee's income. Now, this is not a case where the Inspecting Assistant Commissioner merely referred to the finding of the Income-tax Officer in the assessment proceedings and levied penalty. He referred to the reasons assigned by the Income-tax Officer for rejecting the said evidence and considered the very same material over again and for the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence, but is also supported by reasons therefor. The minimum that is expected of the Tribunal is that it discusses the evidence and gives reasons for its conclusion. It cannot merely state its conclusion and ask it to be accepted by this court. In this case, in particular, the Tribunal was reversing the finding of the Inspecting Assistant Commissioner. In such a case, it was obligatory upon it to say why the reasoning and the finding of the Inspecting Assistant Commissioner is not correct and for what reasons the said evidence is liable to be accepted as sufficient to rebut the presumption arising against the assessee from the Explanation. The Tribunal ought not to have treated this matter in a cavalier fashion or as a summary proceeding, more particularly when it was reversing the finding of the authority below. Until and unless the assessee succeeded in rebutting the presumption arising from the Explanation, no occasion could have arisen for the Tribunal to see whether and what material the Department has brought on record to sustain the penalty. For the above reasons, we decline to answer the first question and call upon the Tribunal to re-hear the appeal only to the extent o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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