TMI Blog1994 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... see had concealed the particulars of income and as such penalty of Rs. 9,40,000, Rs. 2,33,000 and Rs. 13,50,000 for the assessment years 1967-68, 1968-69 and 1969-70, respectively, levied under section 271(1)(c) could not be sustained ? 2. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in cancelling the penalty of Rs. 9,40,000, Rs. 2,33,000 and Rs. 13,50,000 for the assessment years 1967-68, 1968-69 and, 1969-70, respectively, levied under section 271(1)(c) in spite of the fact that the income returned by the assessee is less than 80 per cent. of total income finally assessed ?" The assessee has been assessed in the status of an "individual". The relevant previous years are the financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in imported nylon and synthetic and smuggled yarn. The Income-tax Officer also made enquiries with the local Sales Tax Officer which showed that the assessee had filed quarterly sales tax returns only for three quarters up to December, 1966, showing the sales and purchases at Rs. 2,04,94,044 and Rs. 2,03,86,188, respectively. The Income-tax Officer in his order for the assessment year 1967-68 mentioned that the Department had seized certain account books of one Abdul Sattar Abubaker, who, in his statement dated September 27, 1971, said that he was carrying on business of "havalas" by issuing bogus sales bills to enable other parties to inflate their purchases. He stated that one main party who was given these havalas and bogus sales bills w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee in his settlement petition that he had given certain percentage of share to his four associates. The Tribunal ultimately held that the income of the assessee for the assessment years 1967-68, 1968-69 and 1969-70 was Rs. 7,00,000, Rs. 2,35,000 and Rs. 9,50,000, respectively. The relevant particulars in this regard are set out in tabulated form as follows: ------------------------------------------------------------------------------------------------------------------------------ Assessment Total income Total income determined by the ---------------------------------------------------------------------- year returned ITO AAC ITAT Rs. Rs. Rs. Rs. ----------------------------------------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermination of the income of the assessee on the basis of certain estimate would not be sufficient to support the stand of the Revenue that the assessee had concealed the particulars of his income. From these findings of the Tribunal, the present reference has been filed. The Explanation which has been inserted in section 271 of the Act with effect from April 1, 1964, and which was in existence during the assessment years in question states that where the total income returned by any person is less than eighty per cent. of the total income as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is a rebuttable presumption that the assessee has concealed income and the onus is on the assessee to rebut the presumption by cogent and reliable evidence. In the case reported, the Tribunal held that the assessee's explanation was false, but the Tribunal had cancelled the order of penalty. The Supreme Court held that the Tribunal was not justified in cancelling the order of penalty. The same is the position in the present case before us. This decision has been followed by our High Court in the case of CIT v. Lunidaram Tulsidas Punjabi [1993] 204 ITR 674, to which decision one of us (Dr. Saraf J.) was a party. In the premises, the Tribunal was not justified in cancelling the order imposing penalty. The questions referred to us ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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