TMI Blog1996 (5) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified in law in reversing the order of the Commissioner of Income-tax (Appeals) deleting the penalty of Rs. 32,208 imposed by the Income-tax Officer distinguishing the case-laws on the point relied on by the assessee and relying on the case-laws mentioned in the order passed on appeal ?" The facts for the purpose of answering the above questions may be stated as follows : The assessee is a firm registered under the Partnership Act and is engaged in the business of purchase and sale of various types of hardware goods including G. C. I. sheets. The assessee-firm follows the mercantile system of accounting. During the assessment year 1977-78 on or about March 15, 1977, the assessee- firm in the regular course of business of dealing in hardware goods, sold 45 bundles of G. C. I. sheets valued at Rs. 24,250 to one Biswas Brothers of Dharmanagar in the State of Tripura. The contention of the assessee was that the sale was made on cash payment, vide Cash Memo No. 7690 for the said amount issued by the assessee-firm. It was a local sale and the delivery was effected on the spot to the repre sentative of Biswas Brothers and, therefore, no Central sales tax was charged and this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with two bills by post. The Income-tax Officer, Agartala, there fore, requested the assessee-firm to confirm whether the said 45 bundles of G. C. I. sheets were sold on credit to Biswas Brothers and whether it received the payment of Rs. 24,402 in cash on April 6, 1977. The assessee-firm replied to the said letter stating that on March 15, 1977, Mr. P. K. Biswas of the said firm visited their shop and placed orders for some hardware goods including 45 bundles of G. C. I. sheets and these orders were noted on katcha slip fardis as per practice followed for delivery and subsequently on March 15, 1977, the representative of Biswas Brothers came for taking delivery of the goods. The assessee-firm also disputed the averments made by the Dharmanagar firm, Biswas Brothers, and no katcha slip (fardi) was sent to Shri Biswas by post. It was further informed that a sum of Rs. 5,052.78 was received by the assessee-firm from the said Sri Biswas at Gauhati on April 5, 1977, and not on April 6, 1977, as alleged by Biswas Brothers. On or about April 26, 1979, the Income-tax Officer, Gauhati, issued a notice under section 131 of the Act to one of the partners of the assessee-firm, Shri Ashit Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehind the back of the assessee-firm and depriving the assessee-firm of any opportunity to cross examine and verify the testimony of the said Sri Biswas. He also could not produce any document in support of his contention because according to the assessee-firm in the case of credit sale definitely he would have received credit memo and such credit memo ought to have been produced just after he received the goods. According to the assessee-firm, there was no reason to believe an oral statement given by the said P. K. Biswas of Biswas Brothers and any partner or any representative of the assessee-firm and disbelieving the contention of the assessee-firm. The assessee-firm has also pointed out that it was a cash sale and it is a fact that these bundles were consigned from Guwahati to Dharmanagar by rail by Biswas Brothers who admittedly acted as consignor and consignee both and this was sufficient to indicate that there was no credit sale. Notwithstanding the fact, the Income-tax Officer imposed penalty. Against that the appeal was filed before the Commissioner of Income-tax (Appeals), Gauhati, and the Commissioner of Income-tax (Appeals), however, after going through the entire matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved. Mr. Bhattacharjee, learned senior counsel, however, disputes the contention, According to him all the three (3) questions are questions which involve questions of law and, therefore, this court is to give opinion. It is true normally when a Tribunal comes to a conclusion that the assessee had concealed certain income, it may be a question of fact if after proper assessment of the facts placed before the Tribunal, the Tribunal comes to the conclusion but, while finding an assessee of his guilt of concealment after the procedure prescribed is not followed, and if the Tribunal goes contrary to the provisions of law in arriving at such conclusion, in our opinion, it is definitely a question of law. In this case learned counsel for the assessee has drawn our attention to the provision of section 271(1)(c) and also proviso to the said Explanation 1. According to learned counsel for the assessee that the Tribunal jumped to the conclusion regarding the guilt of the assessee without first deciding whether the provisions contained in the proviso are fulfilled or not. We find sufficient force in the contention of learned counsel for the assessee and, therefore, we reject the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the aforesaid firm, Biswas Brothers, and that too in the absence of the partners of the assessee-firm. This statement was forwarded by the Income-tax Officer, Agartala, to his counterpart at Gauhati Income-tax " A " Ward, Gauhati, and this was the sole basis for coming to a conclusion that the assessee had concealed the income. No effort was made by the Assessing Officer, namely, the Income-tax Officer, to examine the said Shri P. K. Biswas in the present penalty proceedings and in the presence of any of the partners or representatives of the assessee-firm. On the other hand, the Income-tax Officer asked one of the partners of the assessee-firm to produce all the records and also evidence. One Shri A. K. Banik, as partner of the assessee-firm, appeared before the Income-tax Officer and gave his statement and also produced the relevant records including the credit memo in respect of the other two sales that took place simultaneously on the same day, i.e., March 15, 1977. Thereafter, the Assessing Officer, i.e., the Income-tax Officer, insisted that the assessee-firm produce more witnesses to substantiate the claim. The Income-tax Officer and the Tribunal also had given muc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record and inference drawn from the record that the assessee was not guilty of any fraud or any gross or wilful neglect and if the Revenue had not adduced any further evidence, then in such case, the assessee cannot come within the mischief of the section and suffer the imposition of penalty. That appears to be the true effect of the Explanation." From the above decision, it is abundantly clear that the fact-finding body, namely, the Income-tax Officer or the appellate authority has to decide whether on the basis of certain materials which are acceptable materials that the assessee had committed fraud in concealment of income. We have gone through the judgment of the Tribunal. We do not find any finding in this regard. Dr. Saraf, learned counsel for the Revenue, has strenuously argued that after the amendment of 1964 the word " deliberately " has been deleted and, therefore, the Revenue Department is relieved of the onus of proving the mens rea which was obligatory prior to 1964 amendment. It is true that by the said amendment, deletion of the word " deliberately " which preceded the word " concealed ", shifted the onus to prove the mental state to the assessee. We are of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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