1984 (12) TMI 44

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..... d any evidence to come to the finding that the assessee was not guilty of fraud or any gross or wilful neglect in not returning the correct income within the meaning, of the Explanation to section 271(1)(c) of the Income-tax Act, 1961 ? 3. If the answer to question No. 2 is in the negative, then, whether, on the facts and in the circumstances of the case and on a correct interpretation of the Explanation to section 271(1)(c) of the Income-tax Act, 1961, the Tribunal was justified in cancelling the order of penalty made under the said section ? " The assessee is a firm registered under the Income-tax Act and the relevant assessment year is 1963-64. The return of income was filed on August 20,1963, showing income of Rs. 57,174 but subsequ .....

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..... ot proved that, the assessee had been guilty of concealment of income. The Tribunal accordingly cancelled the order of penalty. The question is whether, on the facts and in the circumstances, the Tribunal was right in its conclusion that the onus that lay on the assessee under the Explanation to section 271(1)(c) of the Income-tax Act, 1961, was discharged. The said Explanation presumes gross or wilful neglect on the part of the assessee in the circumstances stated therein. The presumption is a rebuttable presumption. The assessee has first to discharge the onus. If the presumption is rebutted by evidence, then the onus is shifted to the Department to prove that the assessee has concealed the income or has furnished inaccurate particulars t .....

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..... e concerned bank. It is not the case of the Department that the creditors were not found in the given addresses or they did not respond to the summons issued to them under section 131 of the Income-tax Act, 1961. The Tribunal after taking into consideration the entire facts and circumstances came to the conclusion that the assessee had discharged the onus and the Department had not placed any evidence to rebut the material evidence produced by the assessee. It cannot be said that in arriving at the said conclusion, the Tribunal relied on any irrelevant material. The view taken by the Tribunal cannot be said to be either perverse or unreasonable. In the premises, we answer the first question in the negative and the second question in the a .....

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