TMI Blog1983 (12) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty, if paid, shall be refunded according to law. It appears that the Sales Tax Officer inspected the shop of the dealer on January 10, 1973, and took in his possession certain account books. An assessment order was passed on January 20, 1977, relating to the year 1973-74. A notice under section 15-A(1)(c) was served on the dealer to show cause why a penalty should not be imposed on them for deliberately furnishing inaccurate particulars of turnover and also concealing substantial particulars of the turnover. The notice was contested by the dealer and it was asserted that some of the account books which were taken into custody by the Sales Tax Officer on January 10, 1973, did not relate to their business but these relate to the sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e private arhat business conducted by one of the partners of the firm Madan Mohan Bhargava, but those relate to the business of the assessee-firm. Learned counsel urged that the lower revisional authority, without setting aside that finding, has acted illegally and with material irregularity in exercise of jurisdiction in quashing the penalty imposed under section 15-A(1)(c) of the Act. He has further submitted that there was deliberate concealment of particulars and inaccurate turnover was deliberately furnished by the assessee and as such, the penalty imposed under section 15-A(1)(c) of the Act deserves to be maintained. In reply, learned counsel for the opposite party urged that the burden of proof lay on the department for establishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of survey that the assessee had concealed some turnover. In that view of the matter he found that the department has not discharged the burden of proof which lay on it to establish positively the mens rea and the fact of concealment by the assessee. I have given my anxious consideration to the argument of the learned counsel for the parties and I find much substance in the argument advanced by the learned counsel for the opposite party. The question whether there had been a deliberate concealment of particulars of turnover and the assessee had furnished inaccurate turnover is essentially a question of fact and the finding recorded by the lower revisional authority on the said fact cannot be questioned in revision under section 11(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's books of account had not been accepted and a best judgment assessment has been made at a figure higher than that indicated in the dealer's turnover it would not mean that the dealer had deliberately furnished inaccurate particulars of the turnover so as to attract the provisions of section 15-A(1)(a) and (c) of the Act. There should be some element of mens rea before it can be said that there was concealment of turnover or that a false return was furnished so as to make the dealer liable to pay penalty under the aforesaid provision. In penalty proceedings the taxing authority has to deal with the matter independently of assessment proceedings by drawing separate proceedings and proceed to decide the case in accordance with the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xing authority is bound to consider the matter afresh on the material before it, and in the light of the burden to prove resting on the Revenue, to ascertain whether a particular amount is a revenue receipt." It was further held: "The mere falsity of the explanation given by the assessee, it was observed, was insufficient without there being in addition cogent material or evidence from which the necessary conclusion attracting a penalty could be drawn. These principles were reiterated by this Court in Commissioner of Income-tax, Madras v. Khoday Eswarsa Sons [1972] 83 ITR 369 (SC)." In Commissioner of Income-tax, Lucknow v. Mohinder Singh, Prop: M/s. United Industries, Hardoi 1980 Tax LR 1178; 1980 UPTC 1113 (Volume II), the Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid rokar bahi, which is always liable to be contradicted, there is no material in the hands of the department to positively prove the mens rea and the facts of concealment. The assessing authority as well as the lower appellate authority have held that the seized account books relate to the business of the assessee and not to the private arhat business of partner Madan Mohan Bhargava on the ground that Madan Mohan Bhargava had not got himself registered as a registered dealer and that he had not submitted his return at the relevant time. This could not be a sufficient ground for holding that the assessee had deliberately concealed the particulars of the turnover or that he has deliberately submitted an inaccurate turnover, spec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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