TMI Blog2004 (7) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... mposable under section 271(1)(c) with reference to the tax sought to be evaded by the assessee. – Held that Tribunal was justified in invoking the provisions of Explanation 1 as it stood on February 10, 1978, i.e., the date of filing the return - - - - - Dated:- 27-7-2004 - Judge(s) : R. K. AGARWAL., K. N. OJHA. JUDGMENT The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for the opinion to this court: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in invoking at the Appellate Tribunal's stage the provisions of Explanation 1 to section 271(1)(c) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 271(1)(c) of the Act, in respect of the addition of Rs. 13,000 made in the assessment. He, therefore, imposed penalty of Rs. 13,000 under that section vide his order dated March 26, 1980. In appeal before the Commissioner of Income-tax (Appeals), the assessee once again urged that no penalty could be imposed under section 271(1)(c) of the Act in respect of the addition of Rs. 13,000 made in the assessment. The Commissioner of Income-tax (Appeals), however, upheld the action of the Income-tax Officer. In further appeal before the Appellate Tribunal, on behalf of the assessee, it was submitted that the Commissioner of Income-tax (Appeals) was not justified in applying the provisions of the Explanation to section 271(1)(c) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case and not the provisions which were applicable to the assessment year under consideration. For this proposition, reliance was placed on the decision of the hon'ble Supreme Court in the case of Brij Mohan v. CIT [1979] 120 ITR 1. Before the Tribunal, the learned representative for the Department, on the other hand, strongly relied on the orders of the income-tax authorities and justified their action. Relying on the decision of the hon'ble Orissa High Court in the case of CIT v. Ganpatrai Gajanand [1977] 108 ITR 403, he submitted that the Income-tax Officer was fully justified in imposing penalty under section 271(1)(c) of the Act in a case where he had made certain additions under section 68 of the Act. Relying on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. In view of the decision of the hon'ble Supreme Court in the case of Guduthur Bros. [1960] 40 ITR 298, the Appellate Tribunal did not accept that just because the income-tax authorities had applied the provisions of law, as they stood prior to the amendment made with effect from April 1, 1976, the entire penalty proceedings could be quashed. It was of the view that since the assessee had not offered any explanation regarding the nature and source of the deposits of Rs. 13,000 added in its income, the assessee was not entitled to the benefit of the proviso to Explanation 1 of section 271(1)(c) of the Act as applicable in the instant case. It, therefore, upheld the action of the income-tax authorities in imposing penalty. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the computation of the total 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) or the Commissioner 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 conce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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