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TMI Blog1985 (5) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... in taking the view that mens rea need not be established in the proceedings drawn under section 271(1)(c)? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that no penalty under section 271(1)(c) is leviable in this case ? " The Tribunal, vide its order dated December 20, 1976, declined to make a reference when asked for by the Revenue being of the view that no question of law arose. The material facts are that the assessee was a wholesale and retail dealer of liquor. Nearing the close of the accounting year, the assessee claimed to have made sales at a loss. The assessee also claimed to have paid a sum of Rs. 7,800 to the police for organising raids to prevent sale of illicit liquor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal observed as follows: In view of this rule, it is to be seen whether or not the assessee succeeded in proving by preponderance of probability that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. The case of the assessee is that there was no suppression of the sales and they were fully accounted for. According to the assessee, the addition of Rs. 85,000 is purely based on estimate of the Department and there is no basis for that. The assessee means to say that there is no positive evidence to prove that the sum of Rs. 85,000 really represented the income of the assessee. Before imposing penalty, the Revenue must establish that the subject-matter of penalty really represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Joshi v. Ajit Mills Ltd. [1977] AIR 1977 SC 2279, a Constitution Bench of the Supreme Court has held that the classical view that " no mens rea, no crime " has long ago been eroded and several laws especially regarding economic crimes and departmental penalties have created severe punishments even where the offences have been defined to exclude mens rea. That element permeated in CIT v. Anwar Ali [1970] 76 ITR 696, when the Supreme Court interpreted section 28 of the Indian Income-tax Act, 1922. Later, when the present Act was amended by the Finance Act, 1964, by causing changes in section 271(1)(c), the efficacy of Anwar Ali's case [1970] 76 ITR 696 came to be doubted. This court initially in Addl. CIT v. Karnail Singh [1974] 94 ITR 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arnail Singh's case [1974] 94 ITR 505 (P &.H), does not lay down the law correctly. " It is obvious that, the Tribunal's view is of a time when Vishwakarma Industries' case [1982] 135 ITR 652 (P & H) [FB], had not appeared on the scene. It is equally obvious that the Tribunal took support for its view from Anwar Ali's case [1970] 76 ITR 696 (SC). On these grounds alone, a statement of the case would be required to be made to this court for referring the aforesaid two questions of law. To be fair to the learned counsel for the assessee, it must be noticed that he asserted on the strength of a few precedents like CIT v. Dewan Singh Gurbachan Singh [1983] 142 ITR 435, a decision of this court, to contend that sufficiency or otherwise of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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