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TMI Blog2002 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... alty levied on the assessee under section 271(1)(c) of the Act to the extent of Rs. 5,93,432. Briefly stated the background facts are that in respect of the assessment year 1985-86, the Assessing Officer while completing the assessment made certain additions/disallowances. However, in this appeal we are concerned with the disallowances made under the following heads: 1. Electricity and water charges Rs. 68,378 2. Connection charges &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so far as the first three items were concerned, the addition/disallowance having been deleted by the Tribunal in the quantum appeal, no penalty could be levied in respect thereof and as regards the fourth addition on account of capital gains, he was of the view that the assessee had disclosed all the material facts relating to the sale, which was duly reflected in the balance-sheet and a note for not taking the sale to the profit and loss account was appended to the director s report, which formed part of the balance-sheet of the assessee. The Commissioner of Income-tax (Appeals) thus deleted the penalty levied in respect of the aforenoted items. The assessee seems to have accepted the said order. However, the Revenue took the matter in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essence, the Explanation (after 1964) is a rule of evidence. Presumptions which are rebuttable in nature are available to be drawn. The initial burden of discharging the onus is on the assessee. Explanation I automatically comes into operation when in respect of any facts material to the computation of the total income of any person, there is failure to offer an explanation or the explanation offered is found to be false by the Assessing Officer or the first appellate authority, or an explanation is offered which is not substantiated. According to the proviso to Explanation 1, the onus to establish that the explanation offered was bona fide and all facts relating to the same material to the computation of the income have been disclosed by h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew, these are pure findings of fact, beyond the limited and restricted scope of appeal under section 260A of the Act. As regards the plea of learned counsel for the Revenue that the Tribunal should have awaited the decision of the High Court in the reference arising out of quantum proceedings, we feel that we can do no better than to refer to the decision of this court in CIT v. Popular Jewellers [1999] 238 ITR 676, wherein R.C. Lahoti J. (as his Lordship then was) observed that in such a situation the appropriate course for the Revenue was to have requested the Tribunal to adjourn hearing in the appeal in the penalty proceedings sine die awaiting the decision of the High Court in the quantum proceedings. It was held that since in that c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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