TMI Blog1993 (9) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate is granted is (at page 476) : "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that no penalty could be imposed with reference to the cash deposits on the principle of Anwar Ali's case [1970] 76 ITR 696 (SC), even after the amendment of section 271 in 1964 ?" The assessment years concerned herein are 1962-63, 1963-64, 1965-66, 1966-67 and 1967-68. The assessee is an individual running a tea stall in Nainital. The returns filed by him were not accepted and assessment was completed on best judgment. Subsequently, certain information came into the possession of the Department which indicated concealment of income in respect of those years. A notice under section 148 was issued to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt is of the opinion that introduction of the Explanation does not make any difference to the principles enunciated in Anwar Ali's case [1970] 76 ITR 696 (SC). Anwar Ali's case [1970] 76 ITR 696 (SC) dealt with section 28(1)(c) of the Indian Income-tax Act, 1922. Section 28(1)(c), in so far as is relevant, read as follows : "28. Penalty for concealment of income or improper distribution of profits.-(1) If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal in the course of any proceedings under this Act, is satisfied that any person- . . . . (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income...." Section 271(1)(c) of the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. That was a case where an undisclosed cash deposit was discovered and the explanation offered by the assessee in that behalf was rejected but the Revenue did not adduce any further material from which it could be inferred that the assessee had concealed the particulars of his income or had deliberately furnished inadequate particulars in respect of the same or that the disputed amount was a revenue receipt. In that situation, this court agreed with the High Court that the levy of penalty was not warranted. Indeed, this court approved the approach and tests evolved by Chagla C. J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablishes that his failure to return the correct income was not on account of any fraud or any gross or wilful neglect on his part, it is evident, no penalty can be levied. Even after the amendment of 1964, the penalty proceedings, it is evident, continue to be penal proceedings. Similarly, the question whether the assessee has concealed the particulars of his income or has furnished inaccurate particulars of his income continues to remain a question of fact. Where the Explanation has made a difference is while deciding the said question of fact the presumption created by it has to be applied, which has the effect of shifting the burden of proof. The entire material on record has to be considered keeping in mind the said presumption and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, governed by the said Explanation. It is true that it was an appeal against an order of the High Court rejecting the application of the Revenue under section 256(2) of the Act, even so the following pertinent observations were made (at page 54) : "It is true that the presumption that arose was a rebuttable presumption that there was concealment of income and if there was cogent material to rebut the evidence that was acceptable, then the presumption would not stand. In the instant case, the falsity of the explanation given by the assessee has been accepted by the Tribunal. The Tribunal stated that, in the instant case, no doubt the Income-tax Officer was justified in saying that not only the explanation was not convincing but false b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he introduction of the said Explanation. The question referred to the High Court in this case speaks of cash deposits. Whether it is a case of undisclosed or unexplained cash deposit or any other concealment, the standard is the same. The principle enunciated in Anwar Ali's case [1970] 76 ITR 696 (SC), that mere rejection of the Explanation of the assessee is not sufficient for levying penalty and that the Revenue must go further and establish that there has been conscious concealment of particulars of income or a deliberate failure to furnish accurate particulars, is no longer necessary. The cases to which the said Explanation is attracted have to be decided in the light of the law enunciated in Mussadilal Ram Bharose's case [1987] 165 I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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