9911796707
TMI Blog1983 (8) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act, 1961, as it stood amended at the relevant time, was not correct in law?" A statement of the case has been submitted by the Tribunal which will speak out the facts on record in respect of the assessment year 1964-65. The assessee filed a return disclosing an income of Rs. 1,110 only. The ITO determined the total income at Rs. 25,610 which was reduced in appeal to Rs. 23,610. The addition was made for an amount of Rs. 22,500 which represented cash credits in the names of four partners of the assessee-firm as follows : Rs. 5,000 on 4-1-63-Prasadi Sao 7,500 on 4-1-63-Ramdhari Sao 7,500 on 4-1-63-Thakuri Sao 2,500 on 4-1-63-Rameshwar Prasad. The ITO imposed a penalty of Rs. 5,773 with reference to these additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had concealed. The Tribunal referred to certain case law and held that the proceeding being penal in character, the burden was on the ITO to establish that the assessee bad committed the offence charged against him. The Tribunal, therefore, held that penalty was not imposable and allowed the assessee's appeal. We may at once state that the Tribunal has completely misdirected itself on the question of law. The law with regard to imposition of penalty for deliberate and conscious concealment of income has undergone substantial change by the insertion of the Explanation to s. 271(1)(c) of the Act. Prior to the Explanation appended to that clause, the entire burden was on the Department to prove by positive evidence that there was a consci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d inaccurate particulars of such income. In a case where there is a difference of more than 20 per cent. in the income returned by any person and the total income as assessed under the various provisions of the Act, the Explanation is attracted. While calculating the difference of 20 per cent. between the income returned and the income assessed, from the latter has got to be deducted the amount of expenditure incurred bona fide by the assessee for the purpose of making or earning income included in the total income but which has not been allowed as a revenue expense or a permissible deduction under any provision of the Act. As soon as it is found that there was a difference of more than 20 per cent. in the income returned and the income ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l neglect. Ordinarily and generally there cannot be any direct evidence to prove such a fact. The assessee merely has to place materials of the primary facts or the circumstances which in all reasonable probability would show that he was not guilty of any fraud or gross or wilful neglect. He may discharge this onus by placing the facts found in the assessment order to show that the facts found therein had not in the least given an inkling of fraud or gross or wilful neglect on the part of the assessee and, therefore, it must be held without proof of any other fact that there was no fraud committed by the assessee in his failure to return the correct income nor was he acting grossly or wilfully negligently." So far as the last part of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut as to whether the initial onus placed on the assessee by the insertion of the Explanation to s. 271(1)(c) of the Act has been discharged or not and then only can the onus shift to the Department. With regard to the standard of proof, we have already said what is the law laid down and well settled. Mr. K, N. Jain, learned counsel for the assessee, submitted that the assessee had also offered explanation that it had income from agricultural sources which has not been taken notice of either by the ITO or by the AAC or by the Tribunal. It will be for the Tribunal while hearing the parties afresh in the matter to examine this question and to see whether there is any merit in this case or not and if it is a fact that through oversight or ina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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