9911796707
TMI Blog1982 (12) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1961, as it stood at the relevant time, read with the Explanation appended thereto was bad in law ? " For the assessment year 1965-66, the question referred to this court is : " Whether, on the facts and in the circumstances of this case, the Income-tax Appellate Tribunal was justified in taking the view that imposition of penalty upon the assessee under section 271(1)(c) of the Incometax Act, 1961, as it stood at the relevant time, read with the Explanation appended thereto, was bad in law ? " As will be noticed from the statement of case submitted to this court, the facts relating to both the matters are the same and the questions of law referred to are also in the same terms. Therefore, a consolidated statement of case has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spread over the investment in the assessment years 1964-65 and 1965-66. These additions of Rs. 22,000 each were made in the two assessment years in question. Copies of the assessment orders of the ITO have been annexed as annexs. A and A-1 and form part of the statement of the case. In appeal, the AAC reduced the estimate of cost of construction by Rs. 10,000 and thus allowed a relief of Rs. 5,000 in each year. The addition of Rs. 11,296 was maintained by him. On further appeal before the Appellate Tribunal, the addition of Rs. 11,296 was reduced to Rs. 1,296 only and the balance of Rs. 10,000 was treated as explained. Regarding the investment in the building, the Tribunal estimated the cost of construction at Rs. 50,000 and thus reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not attracted in the circumstances of the case because the circumstances did not lead to the reasonable or positive inference that the assessee's explanation was false and in the circumstances the assessee must be held to have proved that there was no fraud or gross or wilful neglect on his part and even in this view of the matter, the explanation could not justify levy of penalty. According to the Tribunal, the absence of a proof acceptable to the Department cannot be equated with fraud or gross or wilful neglect on the part of the assessee. The Tribunal accordingly cancelled the orders imposing penalties on the assessee for the two years in question. These are all the relevant facts. It may at once be pointed out that the Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween 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 inaccurate particulars with an element of fraud or gross or wilful neglect on the part of the assessee will depend upon the facts and Circumstances of each case. A high standard is always applied for the proof of a positive fact while the standard of preponderance of probability is sufficient to prove a negative fact. What the Explanation demands or requires of the assessee is the discharge of the onus of proof of a negative fact, namely, that there ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he is entitled to. The Revenue must have been sought to be deprived by such illegal means of what it is entitled to. This being the settled legal position, let me now turn to the findings of fact in the instant case. There is no finding that the assessee had concealed any item of income from its account books. Some amounts of cash credit were not found to be satisfactory by the Department. Even so in appeal and on further appeal to the Tribunal, the assessee went on getting some more and more relief. With regard to the cost of construction of the house, the amount expended over the construction as explained by the assessee was discarded on estimate, although it is true that one of the reasons for it was that according to the valuer of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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