TMI Blog1996 (6) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... unts. This initiated the proceedings requiring the assessee to submit an explanation and for the purpose the books of account were impounded. The assessee sought for an adjournment to enable the examination of the books of account. This was on December 16, 1974. On December 19, 1974, the explanation was submitted by the assessee that the accountant, one Sri Sahadevan, who was looking after not only the accounts, but also representing them before the Income-tax Officer, had suddenly left for Bombay. In support reliance was placed on the letter dated December 15, 1974, addressed by the said accountant to Sri Sukumaran, the managing partner, by post. In the scrutiny of accounts which were given to the auditors as stated above, it was found that entries relating to excess credits and debits related to 44 items and this resulted in the filing of a revised return on March 19, 1975. This revised return was accompanied by a profit and loss account as well as balance-sheet. The material showed total income of Rs. 1,13,589. On the basis of the material, the Income-tax Officer completed the assessment on March 31, 1975, in regard to the total income of Rs. 1,14,290. The order shows that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question that the penalty proceedings are in the nature of quasi-criminal proceedings and would have to be looked at on the basis of the preponderance of probabilities as a result thereof. It is really unnecessary to dwell upon the manner in which the Commissioner has approached the question of proof or the standard of proof. It is necessary to emphasise that when the learned Commissioner considered the mistake, while dealing with the submission of the assessee's representative to the effect that the firm promptly filed the revised return, surrendered the accounts and subsequently paid the taxes, being matters required to be considered while fixing the quantum of the penalty, has observed that these mitigating circumstances would certainly go in favour of the assessee in the determination of the quanturn. The circumstances were taken into consideration by the Commissioner to levy a penalty of Rs. 75,000. The Income-tax Appellate Tribunal considered the rival submissions. It was submitted before the Tribunal that the present case was a case of bona fide omission in totalling in the sales ledger. Referring to page No. 154 in the ledger it was submitted that after the entries for De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee outside the provisions of section 271(1)(c) of the Act. The Tribunal has considered the situation on the merits in paragraph 10 of its order. The Tribunal has relied on certain factual positions emerging from the material on record. The Tribunal has visualised a situation of probability that the total of the transactions up to the end of December, 1973, had been made out and in regard thereto, surely through inadvertence the entry of January 1, 1974, came to be made and adding the same, the total was struck at Rs. 8,33,454.70. The Tribunal has recorded as a factual position that there are no other omissions in the said ledger. Precisely, the Tribunal has taken care to observe : " We have looked into the list of various other discrepancies which were detected in the course of audit and there are excess as well as short totallings in various accounts. They are usually in round figures. If the idea was to conceal income, there could not be under-tallying of expenses in round figures. Totalling errors do exist. " The Tribunal has also been careful to observe from the material on record that when the Income-tax Officer pointed out the mistake, apparently Sahadevan the accountan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated August 20, 1981. This was the prosecution against the two partners of the firm, C. K. Sukumaran, the managing partner, and C. K. Krishnan, the second partner. The result of the prosecution, as is available from the discussion in regard thereto by the Tribunal, shows that Sukumaran expired and the prosecution abated in regard thereto. Krishnan came to be discharged and in the course of the observations in the judgment of the learned magistrate, it is observed that the circumstances highly probabilised the defence contention that the mistake crept in the account was a bona fide one. The Tribunal found such a conclusion with regard to the proceedings of the criminal court helpful in the process of reaching conclusions on facts. The above discussion, which we have carried out in greater detail, would show that no question of burden of proof or standard of proof in regard thereto would occur on the factual matrix and consideration thereof by the authorities. The material on record has placed certain situations in support of the prayer that this is a result of the situation of inadvertence. The Tribunal has in detail considered the material to reach the conclusion that the situati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters less difficult. Not only the word " deliberately " was omitted in section 271(1)(c) of the Income-tax Act, 1961, the Explanation introduced a presumption of law which is no doubt rebuttable. It has to be on material relevant and cogent and it is for the fact finding body to judge the relevancy and the sufficiency of the material. If such a fact finding body, bearing the aforesaid particulars in mind, comes to the conclusion that the assessee had discharged the onus, it becomes a conclusion of fact, no question of law arises. We have already paraphrased the findings of fact arrived at by the Tribunal. Several factors have been taken into consideration by the Tribunal, fortified with the situation that the criminal court had to record an order of discharge with pertinent observations that the circumstances highly probabilised the contention of the assessee that the mistake crept in the account would be a bona fide one. In our judgment, several aspects taken into consideration by the Tribunal, deal with the situation of the assessee in regard to pleaded inadvertence, spelt out a question of factual situations. Additionally, even the two questions could not be stated to be any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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