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TMI Blog1982 (4) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal was in law justified in cancelling penalties of Rs. 26,000, Rs. 1,49,000 and Rs. 8,000 imposed by the Inspecting Assistant Commissioner under section 271(1)(c) of the I.T. Act, 1961, in the assessment years 1967-68, 1968-69 and 1969-70 ? " The respondent-assessee, M. Habibullah, is an individual and a non-resident. He had not filed any return of income for the assessment years 1967-68 to 1969-70. On receipt of information that there were a large number of deposits in the bank accounts of the assessee, the ITO took action under s. 147(a) of the Act for these three years. Notices were issued to the assessee and he filed returns showing his income at nil. During the course of assessment, the ITO found that in the previous year releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)(c)/274(2) of the Act and referred the cases to the IAC. The IAC after hearing the assessee held that the assessee had concealed the particulars of his income to the extent of the aforesaid deposits appearing in his bank account in the year under consideration and imposed penalties in the sums of Rs. 26,000, Rs. 1,49,000 and Rs. 8,000 for these three years, respectively. Aggrieved, the assessee took up the matter in appeals before the Tribunal. The Tribunal has taken note of the fact that the findings given in assessment proceedings were relevant and have probative value and further that under the Explanation to s. 271(1)(c) the onus was on the assessee to prove that the failure to return the correct income was not due to any fraud or gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this subsection." It would be seen that this Explanation creates a fiction and it is that where the total income returned is less than eighty per cent. of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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