9911796707
TMI Blog1968 (9) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 271 read with section 274 of the Income-tax Act, 1961? 2. If the answer to question No. 1 is in the affirmative, whether, on the facts and in the circumstances of the case, the assessee had concealed the particulars of his income or given inaccurate particulars thereof with in the meaning of section 271(1)(c) so as to justify the imposition of penalty ? " The material facts are that the assessee is an individual carrying on money-lending business. In the assessment proceedings for the assessment year 1961-62 the Income-tax Officer added two sums, namely, Rs. 3,800 and Rs. 15,000, as the assessee's income from undisclosed sources. The first amount represented credits of Rs. 2,000 on 14th August, 1960, and Rs. 1,800 on 25th Sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of his income represented by the amount of Rs. 18,800 added as income from undisclosed sources. These proceedings were subsequently taken up by the Inspecting Assistant Commissioner as competent authority to levy penalty under the Income-tax Act, 1961, and ultimately a penalty of Rs. 7,500 was levied. The assessee then preferred an appeal before the Tribunal against the quantum of assessment as well as the penalty levied. The Tribunal upheld the addition of Rs. 3,800 and Rs. 15,000 as the assessee's income from undisclosed sources. It, however, set aside the order of the Inspecting Assistant Commissioner imposing the penalty taking the view that, as the assessment for the year 1961-62 was completed under section 23(3) of the Indian Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the assessment was made under the 1961 Act or the 1922 Act. That apart, in this case, the return having been filed on 19th October, 1961, that is, before the commencement of the 1961 Act, the assessment under the 1922 Act was by virtue of the provisions of section 297(2)(a) of the Act of 1961. The proceedings for, assessment under the Act of 1922 were thus proceedings under the 1961 Act itself. The matter is really concluded by the decision of a Division Bench of this court in Kishanlal v. Commissioner of Income-tax. In that case, it has been held that an assessee is liable to penalty under section 271(1) of the 1961 Act for defaults referred to in section 28(1) of the 1922 Act in respect of any assessment for the year ending on 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rebut this charge. Again, the bare fact that the explanation offered by the assessee in the assessment proceedings was rejected and it was held in those proceedings that he had concealed his income or that the explanation was unsatisfactory by itself cannot be made the basis of the conclusion that he has been guilty of deliberately concealing the particulars of his income. No doubt, if the assessee's explanation is found to be deliberately false, then it is possible to infer that he concealed his income. But the authority competent to impose a penalty must expressly find that the assessee's explanation is false." The Income-tax Officer must himself expressly find in penalty proceedings that the explanation given by the assessee was false ..... X X X X Extracts X X X X X X X X Extracts X X X X
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