TMI Blog2002 (2) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... Ward 1(4) KYN b. Ekta Jaipal E-708 Cheque 20,000 Wife of Nephew Ward 1(4) KYN c. Maya M-1665 Cheque 20,000 Wife of Kantilal Nephew Ward 1(4) KYN d. Harilal C-I/84-H(2) Cheque 20,000 Cousin Parsram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income of any person under this Act,- (A)such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) to be false, or (B)such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 6. According to Black s Law Dictionary, false means not true. The word false has two distinct and well-recognized meanings : (i) intentionally or knowingly or negligently untrue; (ii) untrue by mistake or accident. A thing is called false when it is done, or made, with knowledge, actual or constructive, that it is untrue or illegal, or is said to be done falsely when the meaning is that the party is in fault for its error. A statement is false if it was untrue by the person ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion that it is false, then the Assessing Officer can proceed to levy the penalty. Therefore, this Explanation cast a duty on the Assessing Officer that he should first record reasons that there has been concealment of income and then the explanation is sought. These are the basic requirements of natural justice desired by the Legislature for providing this Explanation. Therefore, the initial burden is on the Department to prima facie record that there was concealment and thereafter the explanation is to be sought and in case the explanation is found to be false, then to the extent the income is found to have been concealed and the explanation is found to be false, then the authority can proceed against the assessee. 10. In the case of CIT v. Suresh Chandra Mittal [2000] 241 ITR 124 (MP) action under section 132 was taken against the assessee. This led to reopening of the assessment. Assessee revised the returns. Assessing Officer levied the penalty rejecting the contention of the assessee that revision was made suo motu and additional income was offered to buy peace and to avoid litigation. When the matter was carried to the Tribunal, the following view was taken:- The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n August 21, 2001. Hence, the ratio of this decision is to be followed. In this case, assessee took certain Bank drafts for payments to suppliers of rice in Andhra Pradesh. Entries were made in the accounts not on the dates on which the drafts were obtained but a few days later. It was explained that sufficient cash balance was not available on those dates. Loans were obtained from friends. These loans were payable within a short time, as such no entries were made in the books. Since the assessee was unable to furnish evidence of such loans, it offered the amount for addition. Penalty proceedings were initiated. Assessing Officer did not accept the explanation of the assessee. Penalty was imposed. The Tribunal cancelled the penalty on the ground that in the notice initiating penalty proceedings assessee was not intimated about the proposed action under Explanation 1(B ) to section 271(1)(c). High Court held the imposition of penalty valid. Apex Court affirmed the decision of the High Court. Apex Court has held that by reason of the addition of Explanation to section 271(1)(c), the view taken in the case of Sir Shadilal Sugar General Mills Ltd. (supra) can no longer be said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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