TMI Blog2005 (10) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the records. 2. The relevant facts, briefly stated, are that the assessee is a company engaged in manufacturing of oxygen gas. Return of income declaring loss of Rs. 10,49,036 was filed by the assessee on 29-11-1995. The Assessing Officer completed the assessment under section 144 reducing the returned loss to nil. The assessee had appealed to the Commissioner of Income-tax (Appeals) and the latter remanded the matter to the Assessing Officer for verification of books of account. The assessee appeared before the Assessing Officer alongwith the books of account but stated that he had no objection to the assessment being made at nil income. On the basis of the report of the Assessing Officer, the Commissioner of Income-tax (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punjab Haryana High Court in the case of Prithipal Singh Co. ( supra ) is no longer applicable as the same related to assessment year 1970-71 and, therefore, is inapplicable in this case for assessment year 1995-96. The Commissioner of Income-tax (Appeals) further relying upon the decision of the Karnataka High Court in the case of P.R. Basavappa Sons v. CIT [2000] 243 ITR 776, held that the penalty has rightly been imposed in this case. 4. The assessee is in appeal before us. The learned counsel for the assessee contended before us that the penalty is not attracted in this case insofar as no concealed income was found by the Department. Since the assessee had carried forward losses in order to buy peace and considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1977] 106 ITR 307 (All.) It was accordingly pleaded that penalty may be deleted. 5. The learned Departmental Representative, on the other hand, contended that the law has been amended from time to time and a specific provision has been made to provide for imposition of penalty in such cases where the loss is reduced after the addition of concealed income. Reliance was placed on the decision of the Supreme Court in the case of K.P. Madhusudhanan v. CIT [2001] 251 ITR 99, to support the contention that penalty is chargeable even in the event of agreed assessment by virtue of Explanation to section 271(1)( c ). Reliance was also placed on the decision of Punjab Haryana High Court in the case of Vishwakarma Industries v. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation to section 271(1)( c ), the burden has been shifted to the assessee and on his failure to discharge the burden, penalty under section 271(1)( c ) would be justified. 7. We, therefore, hold that it is not for the revenue to establish that the assessee has concealed the income or furnished inaccurate particulars of income. We now proceed to consider as to whether by the virtue of Explanation to section 271(1)( c ), the assessee can be said to have discharged the onus. Before we consider the facts of this case, it will be useful to refer to section 271(1)( c ) read with Explanation 1 : "271 Failure to furnish returns, comply with notices, concealment of income, etc. (1) If the Assessing Officer or the Commissioner (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent or even any amount of disallowable nature. The assessee had produced the books of account before the Assessing Officer in the course of remand and had accepted the suggestion of the Assessing Officer not to object to the assessment of the income at nil. The explanation of the assessee has got to be considered in the light of facts on record. As per the statement of brought forward losses available to us, it is observed that up to assessment year 1994-95, the assessee had accumulated losses of Rs. 66,68,956. The surrender of Rs. 10,49,036 brought the income of the assessee to nil without any tax liability. The assessee has continued to suffer losses and in assessment year 2004-05, the accumulated brought forward losses are more than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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