TMI Blog1972 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Dated:- 18-12-1972 - Judge(s) : PREM CHAND JAIN., HARBANS SINGH RAI. JUDGMENT This judgment of ours would dispose of Income-tax References Nos. 42 and 43 of 1971. The facts re id as under: For the assessment years 1959-60 and 1960-61, regular assessments had been made in respect of Messrs. Kishan Lal Shiv Chand Rai. Later on, notices were issued under sections 143(3)/148 of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), and in the course of the assessment proceedings in pursuance of those notices, the assessee surrendered certain amounts which it had shown as loans of third parties at the time of earlier regular assessments. The Income-tax Officer accepted those surrenders and made orders of reassessment alt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal for stating the case to this court for opinion along with the questions set out in that application. Those income-tax cases came up for hearing before Mahajan and Tuli JJ. and their Lordships, vide their order dated November 10, 1970, directed the Income-tax Appellate Tribunal to draw up the statement of the case and refer to this court for opinion, the question, " Whether, on the facts and in the circumstances of the case, the order imposing penalty was justified ? " It is in these circumstances that the Appellate Tribunal, Chandigarh Bench, has drawn the statement of the case, and has referred the above mentioned question for our opinion. It was strenuously contended before us by Mr. Sharma that the penalty proceedings are pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department must establish that the receipt of the amount in dispute constitutes income of the assessee and that any finding given in the assessment proceedings for determining or computing the tax is not conclusive, though it is a good piece of evidence. It has also been held in another decision of their Lordships of the Supreme Court in Commissioner of Income-tax v. Khodar Eswarsa and Sons, that penalty cannot be levied solely on the basis of the reasons given in the original order of assessment. It is in the light of the observations made by their Lordships of the Supreme Court in the above-said two decisions that this case has to be decided. On the respective contentions of the learned counsel for the parties, the first question that r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at no opportunity was afforded to the assessee for leading evidence in order to prove its assertions though detailed objections were filed by them. The Inspecting Assistant Commissioner proceeded to impose penalty solely on the basis of the fact that the amounts were surrendered by the assessee at the time of the assessment, as is evident from his observations which read as under, in the order which is attached as annexure " B-1 " with the statement of the case : " In this case what further proof is required regarding the concealment of income when the assessee itself surrendered the amount for assessment. I see no reason why the assessee should agree to be assessed on the hundi loans unless it was the concealed income of the assessee. " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the surrendered amounts were in reality not his undisclosed income, that he had not concealed the same, and that it was for certain reasons that he had made surrender of the amount. Apparently, it is this notion that has prevailed with the Inspecting Assistant Commissioner in deciding the instant penalty cases as is manifestly evident from the order the relevant portion of which has been reproduced above. It is to be borne in mind that the penalty proceedings are distinct from the assessment proceedings and are in the nature of quasi-criminal proceedings. The onus was on the department to positively prove and produce for that purpose, certain other material besides the factum of surrender that the amounts in dispute were the undisclos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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