TMI Blog1986 (7) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... m the (self-occupied) property at Hanuman Road, assessed at Rs. 2,500 this year and Rs. 1,500 being the annuity refund receivable for this year. It was finally assessed at Rs. 1,36,131. On the completion of the assessment a notice under section 271(1)(c) was issued to the assessee for omission of the items of Rs, 2,500 and Rs. 1,500 noted supra. In response to the above notice, the assessee filed a reply dated28-3-1979. This reply dealt with only Rs. 1,500 and not the other omission of Rs. 2,500. It was explained by the assessee here that though he had not disclosed any income on annuity refund (Rs. 1,500) that came to be assessed for this year, no penalty was leviable with regard to the same as the assessee had not received the said refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d; and had proceeded to levy the penalty on the ground that the assessee had concealed the said items of income. The IAC was not justified in doing so. 4. The Commissioner (Appeals) found no merit in the above submissions. According to him the explanation for the non-disclosure given out in first appeal was an afterthought. He noted that the assessee had inherited the property in question on the death of his father, sometime in 1964 and that the assessee had applied to the municipal corporation for transfer of the property in his name in the municipal records as far back as 1966 ; that the municipality made the necessary entry in its records only in 1970 showing the assessee as the owner of the said property. In such a factual context the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, as well as Smt. Archana Ranjan, departmental representative. 7. We have considered the position. One of the arguments taken before us was that the assessee was ignorant of the fact that even the notional income from self-occupied property had to be returned for assessment. The learned counsel's argument was that the concept, ignorance of law could not be an excuse for a statutory default, was an outmoded one ; that on the contrary no man is presumed to know the entire law of the country. The counsel supported this argument by relying on the decision in Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. [1979] 118 ITR 326 (SC). We have seen the decision. That decision is certainly no authority for the proposition argued by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would avail of the concessional rate of sales tax. According to the Court, the claim of the appellant before it could be sustained only on the doctrine of promissory estoppel and this doctrine was not so well defined in its scope and ambit that the Court must necessarily held that the appellant had knowledge of its right to exemption on the basis of promissory estoppel at the time when it sent the letter of 25-6-1970. It was in the context of the discussion on this aspect-fore-knowledge of the doctrine of promissory estoppel that the Court pointed out that there was no presumption that 'every person knows the law'. It quoted with approval Maula, J. in Martindale v. Falkner [1846] 2 CB 706 to the effect that it would be contrary to commonsen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This plea of the assessee, based on 'ignorance' of law, stands rejected. 10. We, however, find some merit in the argument of the assessee's counsel that this is a case covered by the Explanation to section 271(1)(c). Under the Explanation the burden on the assessee is to show preponderance of probabilities. The assessee's explanation is that he had no intention of concealing such small items of income as Rs. 2,500 and Rs. 1,500 in the context of the total income of Rs. 80,556 disclosed by him in the return thus raising probabilities in his favour, i.e., the claim that the notional income (self-occupied property) as well as the annuity refund were omitted to be shown under an erroneous but bona fide belief has to be accepted on probabili ..... X X X X Extracts X X X X X X X X Extracts X X X X
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