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TMI Blog1976 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee carries on business in oil seeds. For the year ending March 31, 1960, relevant to the assessment year 1960-61, the assessee filed a return disclosing an income of Rs. 6,154. The assessment was completed accepting the income returned by the assessee. But later the Income-tax Officer found that the assessee had made certain purchases from Messrs. Narothmal and Company and Messrs. P. Vasanthalal and Company, to the extent of Rs. 14,515 and Rs. 33,255, respectively, and that though they had been recorded in the books of the assessee as credit purchases, they had been actually purchased by payment of cash through banks. In view of this, he reopened the assessment proceedings under section 147(b) of the Income-tax Act. After issuing a notice under section 148 of the Act to the assessee, the Income-tax Officer directed the assessee to explain the sources for cash payment to the bank and to offer explanation as to why the purchases had been shown as credit purchases, while actually they had been paid for in cash. In spite of repeated opportunities given to him the assessee did not produce any evidence for the purchases and the Income-tax Officer, who had obtained the dates of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal, the Tribunal had disposed of four other appeals also, of which one appeal related to the levy of penalty of a sum of Rs. 11,200 under section 271(1)(c) of the Income-tax Act, 1961, on the ground that the assessee had concealed the said income of Rs. 47,770. The three other appeals related to levy of penalty under section 221(1) of the Income-tax Act, 1961, in respect of the defaults committed by the assessee in paying the tax itself. The Income-tax Appellate Tribunal upheld the levy of penalty under section 271(1)(c) of the Income-tax Act, 1961. With regard to the levy of penalty under section 221(1) of the Income-tax Act, 1961, the penalty was originally levied in a sum of Rs. 500 on 16th January, 1965, and subsequently a penalty of Rs. 1,500 was levied on March 11, 1965, and finally a penalty of Rs, 3,000 was levied on March 25, 1965. The Tribunal took the view that in respect of the same tax, within a period of three months, these three different penalties had been levied and that it would be very harsh on the assessee and, therefore, it set aside the penalty of Rs. 500 levied on January 16, 1965, and the penalty of Rs. 1,500 levied on March 11, 1965, and the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties who would be produced before him by the appellant (assessee) and submit his report after cross-examining them. He may also collect further materials which might be necessary to decide on the credit-worthiness of these parties. " The contention of the learned counsel for the assessee is that the Appellate Assistant Commissioner directed the Income-tax Officer to enquire into the credit-worthiness of the four persons thereby indicating that the Appellate Assistant Commissioner accepted the fact that the said four persons had advanced monies to the assessee and that, therefore, it was not open to him at a later stage to reject the evidence of those four persons and come to the conclusion that they had not advanced monies in the present case. We are not able to accept this argument. The above extract from the order of the Appellate Assistant Commissioner does not restrict in any sense the scope of the enquiry to be conducted by the Income-tax Officer. As a matter of fact, the entire case of the assessee was that he had borrowed monies from the four persons referred to already and only with reference to that contention the Appellate Assistant Commissioner directed the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red when we come to the revenue law. Now, the assessee is not charged with having given a false explanation. This is not the gist of the offence under section 28(1)(c). The gist of the offence under section 28(1)(c) is that the assessee concealed the particulars of his income or deliberately furnished inaccurate particulars of such income. Therefore, the department must establish that the receipt of Rs. 15,203 constitutes 'income' of the assessee. There is not an iota of evidence on the record except the explanation given by the assessee, which explanation has been found to be false. Now it does not follow that because the particular explanation given by the assessee is false, therefore, necessarily the receipt of Rs. 15,203 constitutes a taxable income of the assessee. There may be a hundred and one other possibilities as to how this receipt came into the books of account of the assessee." In the second decision, the Supreme Court before which the decision of the Bombay High Court was cited, after referring to the said decision with approval, proceeded to point out : " Another point is whether a finding given in the assessment proceedings that a particular receipt is income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Act, 1961, were pending before the Income-tax Officer, the assessee did not come forward with any explanation in this behalf at all (3) that the assessee came forward with a new case of borrowal from four persons in Pondicherry only before the Appellate Assistant Commissioner ; and (4) that the case of borrowal was found to be false. These facts and the inference drawn by the authorities from these facts will clearly satisfy the requirements laid down by the Supreme Court constituting the last sentence in the extract given above, namely : " Before penalty call be imposed the entirely of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars". The deliberate act of the assessee in showing the cash purchases as credit purchase can lead only to one inference, namely, that he had consciously concealed the particulars of his income. Under these circumstances, we are unable to accept the contention of the learned counsel for the assessee in this behalf and, therefore, we answer the third q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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