TMI Blog1982 (5) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act, 1961, the Tribunal is right in law in holding that the Department has failed to establish that the cash credits amounting to ₹ 17,200 in respect of which no explanation has been offered by the assessee represented the assessee's income? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in cancelling the penalty imposed under s. 271(1)(c) ? 2. Briefly the facts are that the assessee is a Transport Company. On scrutiny of its accounts, it was revealed that cash credits were entered in various names during the previous year relevant for the asst. yr. 1969-70. The assessee produced some of the creditors and filed affidavits of others confirming the loans except in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the Tribunal, it accepted the appeal holdings that the burden was on the Department to establish that the amount received by the assessee constituted its income and that it had concealed the same. It relied upon the decisions of the Supreme Court in CIT Anr., West Bengal-I vs. Anwar Ali (1970) 76 ITR 696 (SC) and CIT, Madras vs. Khoday Eswarsa and Sons (1972) CTR (SC) 295 : (1972) 83 ITR 369 (SC). Consequently it cancelled the penalty. 5. An application under .s 256(1) of the Act was made by the petitioner before the Tribunal to draw upon the statement of the case and refer to this Court the above noted two questions of law. The Tribunal, dismissed the application vide its order dt. 9th Jan., 1976, observing that it was after appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1) as it stood then, reads as follows : 271(1) If the ITO or the AAC in the course of any proceedings under this Act, is satisfied that any person - (a).... ...... ......... ......... (b)... ...... ......... .......... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, He may direct that such person shall pay by way of penalty : (i) ....... ........... ............ (ii) ........ .......... ............. (iii) in the cases referred to in cl. (c) in addition to any tax payable by him, a sum which shall not be less then, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to gross or wilful neglect on his part. Now it would follow from above and the factum of the presumption spelled out therein that in essence the Explanation is a rule of evidence. This indeed appears to be well established both on the language and the principle of this Explain as also by a plethora of precedents holding to the same effect. Further, it must at once be pointed out that the presumption raised by the Explanation are not conclusive presumption. These are only rebuttable presumption. As in the rule under the Civil law, the initial burden of discharging the onus of rebuttal is on the assessee. However, once he does so, he would be out of the mischief of the Explanation until and unless the Department is able to establish afr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion similar to that as is contained under s. 271(1) of the Act. The Tribunal, while deciding the matter, took into consideration the above-said two cases. In that situation, the question of law as contained in question No. 2 does arise which should have been referred by the Tribunal for the opinion of this Court. 8. As regards question No. 1, Mr. Ashok Bhan has fairly conceded that in view of the fact that cash credits of ₹ 17,200 have been treated as the income of the assessee from undisclosed sources, in the assessment order, so this question does not arise. 9. Consequently, we partly accept the petition and direct the Tribunal to refer question No. 2 to this Court for its opinion. No costs. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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