TMI Blog1992 (12) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order and not on the basis of the law as obtained on the date of furnishing of return, i.e., May 21, 1966 ?" The brief facts of the case are that the assessee is a medical practitioner in the Government service. The return of income was filed on May 21, 1966, showing a total income as Rs. 21,736 which included Rs. 18,000 as income from private practice. The assessment was completed on June 17, 1968, and the income from private practice was increased from Rs. 18,000 to Rs. 25,000 on the ground that the assessee has not maintained any account with regard to his private practice. Subsequently, information came to the knowledge of the Income-tax Officer that the assessee has not disclosed his true income in respect of consultation fees received from the Central Government employees and accordingly proceedings under section 147 were initiated. It was found that a sum of Rs. 60,571 has been received by the assessee as consultation and injection charges from the employees of the Posts and Telegraphs Department but the same had not been disclosed in the return submitted. The assessee admitted that he must not have received more than Rs. 40,000 from the employees of the Posts and Tel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey from them. The Income-tax Department, in pursuance of the aforesaid letter, gathered information regarding the receipt from the Posts and Telegraphs Department, by the assessee in the assessment year under consideration. The details of the said information are on record. Before us, on behalf of the assessee, an argument was advanced that the assessee was not given opportunity to see the information which was collected by the Income-tax Department. The Income-tax Officer, in the assessment order, has clearly stated that the assessee was given full opportunity to meet the information which he gathered from the said department. The assessee never informed the Income-tax Officer that he would file correct information regarding his receipts from the said Department before him. Looking to the assessment order and the material on record, it could not be said that the assessee was able to show that the information collected by the Income-tax Department regarding receipts by the assessee in the year of account was an imaginary figure. As a matter of fact, the information gathered by the Income-tax Department could very easily be rebutted by the assessee by producing some official from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was an amendment by Act 75 of 1964 in section 271(1)(c) and an Explanation was inserted according to which, where the total income returned by any person is less than 80 per cent. of the total income (hereinafter in this Explanation referred to as the correct 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 has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section. It has further been submitted that the finding which has been given in the assessment proceedings is a finding of fact which remains unchanged and simply because the original vouchers in respect of the receipt of income by the assessee were not produced by the Posts and Telegraphs Department in the penalty proceedings, an adverse inference could not be drawn. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the decision of CIT v. Devkinandan Bhandari [1983] 144 ITR 178 (MP). It has further been submitted that the law as was prevailing on the date of filing of the first return with regard to the quantum of penalty alone shall be applicable and reliance in this respect has been placed on the decisions in CIT v. Onkar Saran and Sons [1992] 195 ITR 1 (SC) and CIT v. Kanhaiyalal Ghatiwala [1989] 180 ITR 338 (Raj). We have considered the arguments of both learned counsel in accordance with the amendment made in 1964. The following changes were brought in the provisions of section 271(1)(c); (1) From the expression "deliberately furnishing inaccurate particulars of such income", the word "deliberately" was omitted and thus "furnishing of inaccurate particulars of the income" itself was made punishable (2) An Explanation was inserted where the income returned by any person was less than 80 per cent. of the amount on which the assessment was made, the burden was on that person to prove that the failure to return the amount of assessed income did not arise from any fraud or any, gross or wilful neglect on his part. The effect of the change made in 1964 thus was that the burden wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e its affairs in such a manner so that it may not be an easy game for the assessee or official of the Department to get the relevant papers removed from the file in order to escape the liability. Action should have been taken against the concerned person who was responsible for it. In the order of the Inspecting Assistant Commissioner, the copy of the letter dated January 4, 1967, has been reproduced in which it has been shown that the assessee had received the income of Rs. 60,571 from the Posts and Telegraphs Department itself. It has not been alleged that there was any prejudice of the said Department against the assessee. The Inspecting Assistant Commissioner, in the penalty proceedings, has, while reproducing the order of the Tribunal, mentioned that "whatever information was gathered by the Income-tax Officer was brought to the notice of the assessee specifically. From the statement of the assessee, it is clear that, re verifying the bills, of the employees of the Posts and Telegraphs Department and other departments, he received the money from them. The Income-tax Department, in pursuance of the aforesaid letter, gathered information regarding the receipts from the Posts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to discharge his burden initially. The Tribunal has observed that there is concealment of income by the assessee on the basis of his own admission of the figure of Rs. 40,000 which was even more than the income returned and on that basis the concealment was determined. In the case of penalty proceedings where the highest degree of proof is required than in assessment proceedings, the benefit of doubt can be given to the assessee. But that must be based on some evidence contrary to what is in the possession of the Department. The Department has proceeded in the absence of books of account on best judgment basis as was initially done in this case but, when certain facts and figures were received, it was for the assessee to have rebutted the information available in the possession of the Department. There could be circumstances where, for one reason or another, evidence which was initially with the Department has been lost or destroyed. If the said evidence was considered in the assessment proceedings, then simply because the said evidence was not available at the time of penalty proceedings cannot be a ground for exonerating the assessee when he himself is guilty of non production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which the return was filed in response to the notice under section 148. From the facts as found above, we are of the opinion that the Incometax Appellate Tribunal was not justified in placing the burden on the Revenue and reducing the quantum of concealment in the facts and circumstances of this case. The Tribunal has wrongly proceeded on the assumption on the basis of admission of the assessee that the income received from the employees of the Posts and Telegraphs Department was Rs. 40,000. There was no evidence in support of its conclusion and no evidence was brought by the assessee on record to prove that the figures received from the Posts and Telegraphs Department were incorrect. We are further of the view that the Income-tax Appellate Tribunal misdirected itself in computing the amount of concealed income at Rs. 5,000 as against Rs. 25,071 computed by the Inspecting Assistant Commissioner and thus reducing the penalty imposed under section 271(1(c) of the Income-tax Act, 1961, to Rs. 7,500. It is further held that the penalty could be imposed on the basis of the law as was prevalent on the date of furnishing of the original return. The reference is answered according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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