9911796707
TMI Blog2002 (11) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was completed ex parte on February 28, 1983, since the assessee failed to file his return within the time allowed under section 139 of the Income-tax Act, determining the assessee's income at Rs. 14,076. The assessee filed the return on March 28,1983, disclosing a loss of Rs. 79,097. On appeal by the assessee, the Commissioner of Income-tax (Appeals) set aside the ex parte assessment order and directed the Assessing Officer to make a fresh assessment. While making the fresh assessment, the Assessing Officer determined the total income of the assessee for the said assessment year at Rs. 4,81,320 by making certain additions. The additions so made in the course of fresh assessment were as follows: "(a) Lease rent from Odeon theatre 55,466 (b) Sundry cash credits occurring in 1,50,000 the cash-flow statement filed by the assessee (c) Estimated addition towards 14,000 insufficient drawings for personal expenses (d) Estimated addition towards un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as concealment only in respect of two counts, viz., (1) the alleged loan aggregating to Rs. 5,03,110 from Century Investment Corporation, and (2) unexplained investment of Rs. 15,000 in jewellery. Accordingly, the Commissioner of Income-tax (Appeals) directed to delete the penalty levied in respect of the low drawings and the understatement of lease rent from Odeon Theatre. The assessee questioned the order of the Commissioner of Income-tax (Appeals) before the Tribunal. The Tribunal following the decision of the Supreme Court in Sir Shadilal Sugar and General Mills Ltd. v. CIT [1987] 168 ITR 705 and also the decision of this court in the case of CIT v. Pioneer Engineering Syndicate [1991] 188 ITR 287, deleted the penalty by allowing the appeal on the ground that the Department has not made out a case for levy of penalty under section 271(1)(c) of the Act. Learned counsel appearing for the Revenue has contended that the Supreme Court in the case of K.P. Madhusudhanan v. CIT [2001] 251 ITR 99 has held that Shadilal Sugar's case [1987] 168 ITR 705 (SC) is not good law after the addition of the Explanation to section 271 of the Income-tax Act. Hence, the reliance of the Tribunal on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... false, or (B) such person offers an explanation which he is not able to substantiate, 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 subsection, be deemed to represent the income in respect of which particulars have been concealed: Provided that nothing contained in this Explanation shall apply to a case referred to in clause (B) in respect of any amount added or disallowed as a result of the rejection of any explanation offered by such person, if such explanation is bona fide and all the facts relating to the same and material to the computation of his total income have been disclosed by him." On a consideration of the above provision, particularly, the Explanation, the Supreme Court in K.P. Madhusudhanan's case [2001] 251 ITR 99, referred to, while considering the submission on behalf of the assessee that the assessee's acceptance of the additions to his income to buy peace did not follow that the amount that was agreed to be added was concealed income and the Revenue was required to prove the mens rea of quasi criminal offence, has held that the above proposition was undoubte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is absolutely no finding whatsoever from the authorities concerned, as contemplated under the Explanation and in the proviso that the explanation offered was false or the explanation had not been substantiated by the assessee and as to whether the explanation offered is bona fide or not as stated in the proviso to the Explanation. The Tribunal though granted the relief in favour of the assessee, by relying on Shadilal Sugar's case [1987] 168 ITR 705 (SC), has not appreciated the matter in the perspective as stated in the Explanation, but however carne to a conclusion, correctly, in our view, deleting the penalty. The decisions relied on by the assessee, viz., CIT v. S.I. Paripushpam [2001] 249 ITR 550 (Mad) and CIT v. Suresh Chandra Mittal [2000] 241 ITR 124 (MP) are all decisions rendered following the decision of the Supreme Court in Shadilal Sugar's case [1987] 168 ITR 705, which require no further discussion in view of K. P. Madhusudhanan's case [2001] 251 ITR 99. The reliance on the case of the assessee himself reported in P. Govindaswamy v. CIT [2000] 244 ITR 510 (Mad), referred above to sustain the penalty by the Revenue, in our view, is misplaced reliance, in the sense, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings. The Assessing Officer, as fairly admitted by learned senior standing counsel for the Revenue, has not considered the applicability of Explanation 1 to section 271(1) of the Act and given a finding regarding the same. Admittedly, clause (A) of Explanation 1 to section 271(1) of the Act is not applicable as the explanation given by the assessee was not found to be false. The Assessing Officer has also not considered clause (B) of Explanation 1 to section 271(1) of the Act and recorded a finding that the assessee is not able to substantiate his explanation and also failed to prove that the explanation is bona fide. He has also not recorded any finding that all facts relating to the explanation and materials to the computation of total income have not been disclosed by the assessee. We have already seen that the Revenue has not furnished us a copy of the order of the Commissioner of Income-tax (Appeals) upholding the order of penalty. As far as the Appellate Tribunal is concerned, a specific contention was raised on behalf of the assessee that Explanation 1 to section 271(1) of the Act was not applicable, but the contention was rejected by the Appellate Tribunal. The Appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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