9911796707
TMI Blog2000 (8) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales proceeds of household articles sold there in November, 1978. He stated that out of this, Rs. 2,500 was spent and the balance was kept in a paper packet. Regarding the balance amount of Rs, 63,618.50, the assessee represented that it was unaccounted income of Gandhi Sons, of which he is the manager. The assessee also did not have anything to show that the amount of Rs. 12,000 represented the sale proceeds. Regarding Rs. 63,118.50, he represented that it was the consideration by the sale of old empty chests, old gunny bags and old empty drums of Gandhi Sons. He also stated that it was not included in the account of Gandhi Sons. Thus, the assessee did not have any proof to show that the unaccounted money did not belong to him. Subsequently, in response to a notice under section 132(5) of the Act, the assessee stated that a sum of Rs. 60,000 belongs to Kerala Produce Dealers, of which his son was a partner. It was also stated that his son stays with him and the amount belonging to Kerala Produce Dealers was kept in the cupboard on January 22, 1979. A sum of Rs. 3,600 was stated to be the sale proceeds of old empty cases of Gandhi Sons. He put forward the same contention wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the above order of the Tribunal that this appeal is preferred. Shri P. K. Raveendranatha Menon, learned senior counsel appearing for the Department, contended that the Tribunal as well as the Commissioner of Income-tax (Appeals) went wrong in relying on the decision in CIT v. Shri Pawan Kumar Dalmia [1987] 168 ITR 1 (Ker). According to him, under Explanation 1 to section 271(1)(c) of the Act, the burden was on the assessee to show that there was no concealment of income. There was a presumption under Explanation 1 to section 271(1)(c) of the Act that the income represented concealed income and hence penalty was leviable. Shri Raveendranatha Menon also brought to my notice the following observations of the Tribunal: "At the worst it might be a factor for not considering the assessee's explanation satisfactory but it cannot render him liable for penalty". Shri Raveendranatha Menon contended that the burden of proof was placed on the Revenue. It should have been placed on the assessee. Smt. P. Vani, counsel appearing for the assessee, contended that throughout, the assessee has been taking the stand that the amount did not belong to him, the mere fact that the above amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome 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 concealed." As per this Explanation, there is a presumption that the amount added or disallowed in computing the total income of a person shall be deemed to be the income in respect of which particulars were concealed so far as clause (c) of section 271(1) of the Act is concerned. Learned counsel for the appellant, Shri Raveendranatha Menon, contended on the basis of Explanation 1 to section 271(1)(c) of the Act that once it is found during the course of the assessment proceedings that the explanation given with regard to the particulars of income is not accepted and it is added towards the income, then that will be deemed to be the income in respect of which particulars have been concealed. Counsel so submits because, so far as the amount of Rs. 73,000 is concerned, the explanation offered by the assessee was not accepted. Thus, it is deemed to be an amount, particulars of which were concealed. Then the burden is on the assessee to prove that it is not so. Section 271(1)(c) of the Act underwent many changes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the total income returned by any person is less than 80 per cent. of his total assessed income, such person shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part. The Explanation, thus, shifts the burden of proof to the assessee in the situation covered by it. Once the returned income is shown to be less than 80 per cent. of the total income assessed, the presumption comes into play and then the burden shifts to the assessee to establish that his failure to return the correct income was not on account of any fraud or gross or wilful neglect on his part. If he fails to establish the same, the presumption will become a finding--and it would be open to the authority to levy the penalty. But, if the assessee establishes that his failure to return the correct income was not on account of any fraud or any gross or wilful neglect on his part, it is evident, no penalty can be levied." Thus, going by the language in which Explanation 1 is couched, there will b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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