9911796707
TMI Blog1984 (4) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that imposition of penalty upon the assessee under section 271(1)(c) of the Income-tax Act, 1961, as it stood at the relevant time read with the Explanation appended thereto was bad in law ? " The facts relevant for disposal of this case are set out in the statement of the case as submitted by the Tribunal. The assessee is a registered firm carrying on business in milling, arhat, film distribution and jute. The assessment year involved is 1964-65. The ITO made certain additions to the book results shown as he found that the commercial taxes authorities bad seized a khata, and a cash book from the assessee's business premises. Besides various additions made in the trading account, the ITO added Rs. 3,66,000 as income from undisclosed sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the bona fide of the expenses claimed but disallowed had not been doubted. It further held that there was no finding by the Department about the additions which had been retained that there was any concealment of income or filing of inaccurate particulars. The Tribunal was of the view that penalty could not be imposed unless mens rea was established and even if the Explanation to s. 271(1)(c) of the Act was applicable, concealment had to be established and it had to be found that there was furnishing of inaccurate particulars of income by the assessee. It accordingly cancelled the penalty order. The Revenue's application under s. 256(1) of the Act for reference having been rejected, the Department came to this court and, as already state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in Anwar Ali's case [1970] 76 ITR 696 (SC) shall still hold the field. In the case of CIT v. Sardar Bhagat Singh [1983] 142 ITR 836 (Pat), on a review of the relevant decisions on the point, held that though before the insertion of the Explanation to s. 271 (1)(c) of the Act, the onus to prove all the ingredients for levying penalty was on the Department, as soon as it is found that there was a difference of more than 20 per cent. between the income returned and the income assessed, the presumption embodied in the Explanation is attracted and it is for the assessee to prove that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. What will amount to furnishing of ina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed inaccurate particulars. Since there was no finding on this issue by the revenue authorities below, the Tribunal held that the penalty could not be sustained. While deleting the penalty, the Tribunal recorded a finding on the materials on record that the additions and disallowances were made by the Department just on estimate and the Department never proved that though the assessee earned a higher income, it did not disclose it and, therefore, the Department took additional income. The additional income was taken only just on estimate though the assessee might not have earned this income and similar was the position about the disallowances of the expenses. The Tribunal further recorded a finding that the bona fides of the expenses was n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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