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TMI Blog1985 (7) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... e in failing to comply with the notice u/s 142(1)(i) of the Act was equally erroneous. The onus was on the assessee to answer the charge of having failed to comply with the notice u/s 142(1) of the Act. The words of section 271(1)(b) of the Act that if the Revenue is satisfied that any person has, without reasonable cause, failed to comply with a notice u/s 142(1), he shall be liable to penalty are rather crucial. It is obvious, therefore, that the assessee was required to show reasonable cause. That was a matter within the special knowledge of the assessee. The Revenue could not have known what cause the assessee had for failure to comply with the notice. The Appellate Assistant Commissioner categorically held that the story of loss of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to section 271(1)(c) of the Act. That case, therefore, has no relevance for the present case before us. Thus, we are of the view that the Tribunal erred, in law in setting aside the penalty levied u/s 271(1)(b) of the Act. The question referred to us is, therefore, answered in favour of the Revenue and against the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... (CIT v. Standard Mercantile Co. [1986] 157 ITR 139) which was disposed of by us on April 1, 1985, and we held that the assessee having failed to produce the books of account, it had forfeited the right to favourable treatment in terms of section 186(2) of the Act. Parallel to the assessment and the registration proceeding, there was the present penalty proceeding in terms of section 271(1)(b) for non-compliance with the notice issued under section 142(1)(i) of the Act which has given rise to the present reference. 4. No explanation worth the name was given by the assessee in the penalty proceeding nor was any endeavour made by the assessee to substantiate the plea for non-production of the document which had been set up in the assessment p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(1) of the Income-tax Act, 1961?" 5. An outstanding feature which has to be noted in the instant case is that the assessee's explanation for non-production of books of account and for non-compliance of the notice under section 142 of the Act that the books of account were lost while they were in transit in a taxi, was squarely rejected in the assessment proceeding. It was also rejected in the registration proceeding. It is true that in the matter of levy of penalty, the findings of the Tribunal or of the Revenue authorities is not conclusive and that it would be open to the assessee to show that there was reasonable cause for non-compliance of the order but it should not be lost sight of that it is for the assessee to show that h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en deliberate default on the part of the assessee in failing to comply with the notice under section 142(1)(i) of the Act was equally erroneous. The onus was on the assessee to answer the charge of having failed to comply with the notice under section 142(1) of the Act. The words of section 271(1)(b) of the Act that if the Revenue is satisfied that any person has, without reasonable cause, failed to comply with a notice under section 142(1), he shall be liable to penalty are rather crucial. It is obvious, therefore, that the assessee was required to show reasonable cause. That was a matter within the special knowledge of the assessee. The Revenue could not have known what cause the assessee had for failure to comply with the notice. The App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the part of the assessee for imposition of penalty is entirely misplaced. That is a case prior to the introduction of the Explanation to section 271(1)(c) of the Act. That case, therefore, has no relevance for the present case before us. 9. For the reasons stated above, we are of the view that the Tribunal erred, in law in setting aside the penalty levied under section 271(1)(b) of the Act. The question referred to us is, therefore, answered in favour of the Revenue and against the assessee. In the circumstances of the case, there shall be no order as to costs. Let a copy of this judgment be transmitted to the Tribunal under the signature of the Registrar as soon as possible in terms of section 260(1) of the Income-tax Act read with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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