TMI Blog1997 (11) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-firm in the assessment year 1982-83?" The assessee is a partnership firm engaged in Abkari contract. There are 13 partners. One of the partners is Smt. G. Ponnamma. The original assessment of the firm was completed on January 13, 1983, on the net income of Rs. 1,20,430. Subsequently, the Department had conducted search operations in the office premises of the firm and the residential premises of the partners on February 14, 1984. On the basis of the materials collected at the time of the search, the Department found certain bank accounts amounting to Rs. 21,54,240. Additions were made in the reassessment based on the credits found in the bank account. The assessment was confirmed by the Commissioner in appeal and the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athan has accepted that the amount is traceable to the assessee-firm and that he was in full management of the business. The statement of Bharathan was corroborated by the admission of Shri Sukumaran, chief cashier, who had been writing the paying-in-slip as per the instructions of Shri Bharathan for deposits and the assistant cashier, one Shri Regunathan who deposed that the amounts were deposited by him. Shri Bharathan is the husband of Smt. Ponnamma who is admittedly a partner and was in management of the firm. In the course of the search, the Department had also come across the statement of division of profits both accounted and unaccounted in which it was shown that Shri Bharathan had 4/21st share in the profits. The said statement was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestions in favour of the Revenue and against the assessee. I. T. R. No. 14 of 1995.---The following questions were referred for the opinion of the High Court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee had not consciously concealed its income? 2. Whether the Tribunal was justified in setting aside the penalty order?" Both the questions were referred at the instance of the Revenue. The assessee is a registered firm dealing in Abkari business. There were 13 partners. One of the partners is Smt. G. Ponnamma. The Assessing Officer proceeded on the basis that Smt. Ponnamma is only a benami to her husband, Shri Bharathan. The original assessment was completed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be invoked and the facts of the case would justify the scrapping of the penalty. From the order of the Tribunal, we could see that the burden has been wrongly cast on the Revenue when the Tribunal stated as follows : "We have ourselves accepted that the evidence is sufficient for making an assessment. But an evidence which will be sufficient for the purpose of assessment will not be enough for the purpose of levying penalty." It is further stated in paragraph 26 of the order as follows : "No evidence has been brought on record to show that the opening cash balance of the assessee was such that the lender for soiled notes could not have come out of cash balance." From there, it could be seen that the Tribunal was proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he correct income did not arise from any fraud or gross or wilful neglect and the quantum of proof necessary would be that required in a civil case, namely, preponderance of probabilities. The original assessment was completed on January 13, 1983, on a net income of Rs. 1,20,430. On the basis of the search and seizures, reassessment was made fixing a total income of Rs. 21,54,240. The Income-tax Officer found that there was clinching evidence that the fixed deposits made by Shri Bharathan came out of the income of the assessee-firm. It is further seen that but for the materials and evidence disclosed from the raid conducted, the assessment would have been grossly an underassessment of a total income of Rs. 1,20,430 as against Rs. 21,54,24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. In the penalty proceedings under section 271(1)(c) the burden is on the assessee to establish that there is no concealment and the burden had been wrongly placed on the Revenue. Besides, even while invoking the proviso to section 271(1)(c), Explanation 1, we find there are no materials existing or additional materials furnished warranting the conclusion that there is bona fide action on the part of the assessee. However, we are of the view that the applicant must be given another opportunity before the Tribunal to place materials for consideration. If the assessee was aggrieved about the validity of the notice, he should have made a reference application. The assessee having not raised an issue on that point, he is not entitled to r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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