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2016 (5) TMI 878 - ITAT MUMBAIPenalty under section 271(1)(c) - non genuineness of the gift - Held that:- The assessee had not, during the penalty proceedings, filed any explanation about the genuineness of the gift. The FAA surprisingly states that the AO had not made any new material or did not make inquiries. In our opinion, he was shifting the burden of proof from the assessee to the AO. We agree that assessment and penalty proceedings are different proceedings, but it does not mean that the assessee is absolved of filing an explanation rather a plausible explanation about the claims made by him in the return that have been questioned by the AO. Explanation 1 to Sec. 271(1)(c) of the Act, raises a presumption of concealment, when a difference is noticed by the AO, between the reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. The Hon’ble Supreme Court in MAK Data (P. ) Ltd. 's case (2013 (11) TMI 14 - SUPREME COURT), has held that the assessee should first show by cogent and reliable evidence that there was neither concealment of particulars of income nor furnished inaccurate particulars of income. Because of the failure of the assessee to file ‘cogent and reliable evidence’ we are of the opinion that the order of the FAA has to be reversed. Secondly, penalty proceedings are not criminal in nature and the rationale behind the provisions of section 271(1)(c)of the Act is to compensate the State exchequer for the revenue loss caused due to commission or omission of an assessee. In the case before us, the assessee has tried to deprive the State by showing taxable income as not taxable in the garb of Gift. Such an action justifies invoking of the provisions of section 271(1)(c)of the Act. - Decided in favour of revenue
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