TMI Blog1998 (11) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, 1961, for the asses-see to discharge this burden ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in deleting the penalty imposed by the Inspecting Assistant Commissioner under section 271(l)(c) of the Income-tax Act, 1961 ? 3. Whether the finding of the Appellate Tribunal that the assessee did not conceal the particulars of his income or furnished inaccurate particulars of such income, is correct in law and sustainable from any material on record ? 4. Whether in view of the statement of the assessee recorded earlier claiming the amount disclosed in Part III of the return as representing Matka collections and subsequently claiming the same to be bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of income or for furnishing inaccurate particulars were initiated against the assessee. After taking into consideration the materials which were before the Assessing Officer including the fact that when the assessee was found in possession of Rs. 1,35,000 by the concerned authority, in the search proceedings during the previous year in question, the same was explained to be income of receipts of the assessee from Matka business, the authority came to the conclusion that the explanation in response to the notice under section 271(l)(c) in the penalty proceedings is not acceptable to rebut the presumption arising against the assessee and levied the penalty. The assessing authority in the course of assessment proceedings held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the question only on that ground that disclosure of receipts in Part III of the return takes the case out of the purview of concealment of particulars of income did not think it fit to consider the material on record and to apply his mind to the question whether the assessee can be said to have disclosed particulars of his income accurately or is not guilty of disclosing inaccurate particulars. The only question, therefore, which arises out of the Tribunal's order is : "Whether, in the facts and circumstances of the case, solely on the ground that the assessee has disclosed receipts in Part III of the return filed by him, a conclusion can be reached that the assessee is not guilty of concealing particulars of his income or for furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn. That would negative and render otiose the very provisions of the statute. In the context of section 68, if one were to examine the position of law, it is to be seen that section 68 comes into operation only when some amount is found credited in the books of an assessee maintained for any previous year that is to say-in every case, of examination of source of cash credit commences only on disclosure of receipt from one or other party in the books of the assessee. Yet, the law envisages enquiry into these particulars and also envisages, if on such inquiry, the explanation and information furnished by the assessee is not found satisfactory, the same is deemed to be income of that year so much as to the question of assessment of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejection of the explanation furnished by the assessee, there is no material to sustain the plea of concealment. But, on the other hand, if the state of affairs reveals a stage where one can positively reach a conclusion that the fact alleged is proved or disproved, the principle that mere rejection of explanation cannot result in levy of penalty will have no application. To reach this stage also, inquiry will have to be undertaken of the disclosure made in the return or in the statement annexed to the return and to arrive at a finding whether the particulars disclosed are truthful, or false or not proved to be satisfactory. The principle to which the Tribunal has referred would apply in the last case. In the first case, it would be a positi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have ignored that even where there is some disclosure penalty may still be imposed if disclosures in the return are inaccurate. In our opinion, the principle appears to be plain from the reading of the statute itself. Still, if any authority is needed, reference may be made to decisions of various High Courts : (1) Kantilal Manilal v. CIT [1981] 130 ITR 411 (Guj) ; (2) CIT v. Suleman Abdul Sattar [1983] 139 ITR 8 (Guj); (3) CIT v. Namlabhai Bhanabhai [1987] 163 ITR 189 (Guj); (4) CIT v. Vilasben Hasmukhlal Shah (Smt.) [1991] 192 ITR 214 (Guj); and (5) CIT v. Abdulgafur Ahmed Wagmar [1993] 199 ITR 827 (Guj). Except the first case, all other cases relate to disclosure of particulars of income under Part IV of the return by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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