9911796707
TMI Blog1986 (10) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Officer determined the income of the assessee at Rs. 67,907 by his order, annexure 1, dated March 28, 1972. He also held in his assessment order that the assessee was the owner of a truck RJY 1600. But she has neither shown the income earned from this truck in the original nor in the revised returns. He, therefore, took it to be a case under section 271(1)(c) of the Act where the assessee had concealed the particulars of her income or had furnished inaccurate particulars of the income. According to the Income-tax Officer, the assessee had earned Rs. 3,000 as income by plying the truck. He also added a sum of Rs. 12,119 as profit under section 41(2) of the Act. The total income from the truck was thus determined to be Rs. 15,119. But he was not competent to impose penalty; hence he referred the matter to the Inspecting Assistant Commissioner. The Inspecting Assistant Commissioner issued notice to the assessee and heard both the parties at length. The assessee contended before the Inspecting Assistant Commissioner that she was not the owner of the truck RJY 1600. The truck belonged to one Behari Lal. Behari Lal had shown the income from this truck in the return filed by him and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n occurring in the section. It was further argued that the Tribunal did not record a finding whether the submission made by the assessee was sufficient to show that she was not guilty of any fraud or any gross or wilful neglect in not disclosing her income for the year 1967-68 which she earned from the plying of the truck and its sale. Reliance, in support of the contention, was placed on CIT v. Ketini Krishnamurty [1976] 103 ITR 487 (Orissa), CIT v. Puranmal Prabhudayal [1977] 106 ITR 675 (Orissa), CIT v. Gyan Prakash [1979] 116 ITR 513 (All), Vishwakarma Industries v. CIT [1982] 135 ITR 652 (P H) [FB] and Addl. CIT v. Mangalsen Mohanlal [1982] 136 ITR 905 (All). It was, on the other hand, contended by Mr. Daga that the question whether the assessee was guilty of any fraud or any gross or wilful neglect in concealing the particulars of her income or furnishing inaccurate particulars, was a question of fact. Since the Tribunal has held this question against the Revenue, this question of fact should not be reopened in this reference proceeding. He strived his best to sustain the order of the Tribunal. We have taken the respective submissions into consideration. As stated earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), it was observed (p. 486): " That decision (Anwar Ali's case [1970] 76 ITR 696) has no application to initiation of penalty proceedings subsequent to April 1, 1964. The Explanation brought in radical changes. The object of the Explanation was to get over the difficulty created by decisions which placed the burden of proving concealment of the particulars of the income on the Revenue as was done in Anwar Ali's case. The Explanation now places the burden of proving that the failure to return the correct income did not arise from any fraud or gross or wilful neglect of the assessee. The object of the Explanation is to create a presumption in favour of the Revenue in a certain contingency. That is to say, where the total income returned is less than eighty per cent. of the total income assessed, the presumption would apply. The presumption is a rebuttable one and can be displaced by the assessee by proving that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. " The aforesaid decision was followed by the same High Court in CIT v. Ketini Krishnamurty (1976] 103 ITR 487, and it was observed (p. 488): " It would be sufficie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the particulars of income or deliberately furnished inaccurate particulars of such income' occurring in clause (c). Further, an Explanation was added. From the assessment year 1964-65 onwards, the Explanation applied to the proceedings. In cases covered by the Explanation, namely, where the returned income is less than 80 per cent. of the assessed income, the concealment on the part of the assessee is presumed. The presumption is rebuttable by the assessee proving that the failure to return the correct income was not due to fraud or gross or wilful negligence on his part." It was further stated that Anwar Ali's case [1970] 76 ITR 696 (SC) has no application where the provisions of the Explanation are attracted. The aforesaid view was followed by the same High Court later on in Addl. CIT v. Mangalsen Mohanlal [1982] 136 ITR 905 (All) and it was observed that in a case where the provisions of the Explanation, are attracted, the propositions of Anwar A1i's case have no applicability. In Vishwakarma Industries v. CIT [1982] 135 ITR 652, the Full Bench of the Punjab and Haryana High Court had occasion to consider the effect of the Explanation After noticing the various decisions, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te particulars of such income for the purpose of clause (c) of section 271(1) ; (4) this presumption is a rebuttable one. In order to rebut this provision, the assessee should prove and establish that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part ; (5) the burden to prove the lack of fraud or gross or wilful negligence is, no doubt, on the assessee, but he can discharge this burden in more than one way. This onus is not so heavy as is in a criminal case. The onus may be discharged by the assessee by leading evidence or by pointing out the materials available on record in the assessment proceedings or the penalty proceedings. At times, even the explanation of the assessee, its nature and probabilities arising therefrom may be sufficient to discharge the burden provided the explanation is not unfounded. The quantum of proof necessary would be that required in a civil case, having preponderance of probabilities ; and (6) in a case where the provisions of the Explanation are attracted, the ratio of Anwar Ali's case [1970] 76 ITR 696 (SC) is inapplicable. Reference may also be made to Anantharam Veerasinghaiah Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the correct income did not arise from any fraud or gross or wilful neglect on his part. It was incumbent on the Tribunal to record a finding on the aforesaid question of lack of fraud, negligence, etc. It appears that the Tribunal took the view that the bare explanation of the assessee was sufficient. The bare explanation may be sufficient but then it was obligatory on the Tribunal to record a finding that the explanation was sufficient to dislodge the onus lying on the assessee. Unfortunately, the Tribunal has not done so. It appears from the order of the Tribunal that all that was in the background of its mind was the decision rendered in Anwar Ali's case [1970] 76 ITR 696 (SC). The order of the Tribunal does not show at all that the provisions of the explanation were in the background of its mind when it was considering the case. It may be reiterated even at the fault of repetition that the ratio of Anwar Ali's case has no applicability in view of the Explanation to section 27)(1)(c) of the Act. As soon as the provisions of the Explanation are attracted, penalty is exigible. It is, no doubt, true that the question whether there was fraud or gross or wilful negligence on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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