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TMI Blog2000 (7) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... nal is right in law and fact in holding that it cannot be said that 'the assessees have concealed the income or the particulars of income' ; 'mens rea cannot be attributed' and are not the findings wrong, unreasonable militating and the conduct calculated and motivated if viewed in the light of the fact that the returns with 'noting' were filed only after the search and seizure and the returns for all the years were filed together and at the same time ?" The assessment years are 1991-92 and 1992-93. The questions are regarding the imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The assessees are different persons. They are engaged in the business of money-lending. A searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest at 30 per cent. instead of 18 per cent. recorded in the books of account. Thus, the assessments were completed taking the interest collections at 30 per cent. as against 18 per cent. recorded in the books of account and taking the interest on borrowings at 18 per cent. as against 12 per cent. recorded in the books. The Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act and levied the minimum amount of penalty in all these cases. The matter was taken in appeal before the Commissioner of Income-tax (Appeals). The first appellate authority concurred with the Assessing Officer and held that the extra interest collected was income. Therefore, the appellate authority held that the Assessing Officer was jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, the charging of extra interest and paying of extra interest are known to the assessing authority before the assessees furnished the returns of income in these cases for all the assessment years under appeal. Concealment of income or concealment of the particulars of income, or furnishing of inaccurate particulars of income must be found in the returns so as to attract the penalty under section 271(1)(c) and the Explanation thereunder. In the returns also the assessees have appended a note regarding the practice of collection of extra interest, etc., but had contended that the extra interest collected would not constitute their income in terms of section 18D of the Kerala Money Lenders Act". Learned counsel for the Revenue argued th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion reported in CIT v. Shri Pawan Kumar Dalmia [1987] 168 ITR 1 (Ker) held as follows : "Penalty proceedings are distinct and different from assessment proceedings. Findings in the assessment proceedings are not conclusive but are relevant. The entire material available should be considered afresh by the authorities before imposing penalty. Even after the addition of the Explanation to section 271(1)(c), conscious concealment is necessary . The Explanation provides only a rule of evidence raising a rebuttable presumption in certain circumstances. No substantive right is created or annulled thereby ... The initial burden of proof is cast on the assessee to displace the presumption arising in certain cases. The assessee can discharge the onu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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