TMI Blog1969 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... horilal. There was an additional security furnished, being a deposit of Rs. 10,000 standing in the name of one Faqir Chand but that was in the subsequent year and, therefore, in the opinion of the Tribunal, had no relevance to the year in question. By the time the assessment proceedings were taken up, Pishorilal had died and was, therefore, not produced. The other two persons were, however, produced and deposed that they offered their deposits as security to enable the assessee to enjoy the overdraft facilities. The Income-tax Officer and the Appellate Assistant Commissioner came to the conclusion that the said three deposits represented undisclosed income of the assessee and, therefore, taxed the same in his hands. The said amounts had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and held that, "since means rea has not been established by the department to warrant levy of penalty under section 28(1)(c), we cancel the order levying penalty . . . . . ". In the judgment, the Tribunal observed: "Therefore, at best, the reason for the additions being made in regard to these deposits in the quantum assessment could at best amount to the assessee's explanation being not satisfactory. We have gone through the Tribunal's order. We are sorry to say that there is no material in it to support its conclusion that the fixed deposits represented the secret moneys of the assessee-firm. No link has been established between the assessee's moneys and the deposits in question. A perusal of the said order makes it patent that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the revenue had failed to discharge the onus that the concealment was conscious or deliberate. Mr. Kirpal relied on Lal Chand Gopal Das v. Commissioner of Income-tax, Haji Abdul Rahman, Abdul Qayum v. Commissioner of Income-tax and Moman Ram Ram Kumari v. Commissioner of Income-tax. In Lal Chand's case it was held that: "Whatever were the materials in the assessment proceedings are materials in the penalty proceedings also and, if they are sufficient to justify the finding in the assessment proceedings that the receipt was income, there is no reason why they should not be sufficient for the same finding in the penalty proceedings. Once it is found in the assessment proceedings that the receipt is income, it follows that there has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt held that : " Whether the assessee has committed an offence or not, it is for the Tribunal to decide and the majority of the Tribunal having decided that he has not committed an offence, the matter is concluded." Dealing with the legal position, Chagla C. J. held : (1) the penalty proceedings being quasi-criminal proceedings, the department must establish that the receipt in question constituted income of the assessee ; (2) merely because the particular explanation given by the assessee is found to be false it does not necessarily attract penalty ; (3) a decision given in assessment proceedings cannot possibly be binding on the authorities who try the assessee for an offence ; and (4) it is open to the Income-tax Officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealment of delibrate furnishing of inaccurate particulars. Secondly, it is to be proved that the concealment of deliberate inaccuracy is with regard to income. To my mind the principles laid down by Chagla C.J. in the case of Gokuldas Harivallabhdas correctly express the character of proceedings under section 28(1)(c) of the Indian Income-tax Act." The Calcutta High Court approved the decision of the Gujarat High Court in Commissioner of Income-tax v. L.H. Vora. Vora's case' was mainly based on the decision of the Bombay High Court in Gokuldas Harivallabhdas's case. It was held that it was for the revenue to establish that the assessee had committed defaults as set out in section 28. Dealing with the question as to whether the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid decisions relied upon by Mr. Bajaj may be summarised thus : 1. Though the findings arrived at in the assessment proceedings constitute relevant and admissible materials in penalty proceedings, yet they do not operate as res judicata as the considerations relevant in penalty proceedings are different from those in the assessment proceedings. 2. Merely disbelieving the assessee's explanation about the sources of certain amounts entered in his books that they did not belong to him and taking the amounts in the hands of the assessee will not per se justify an imposition of penalty. The department must do something more and establish that the amounts constituted the assessee's taxable income and he was guilty of defaults specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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