TMI Blog1989 (2) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... ,890 to the firm. The respondent/assessee was asked to explain. He stated that a sum of Rs. 2,85,000 was derived by way of income from agricultural properties belonging to him, his wife and his mother, and a sum of Rs. 1,60,000 was obtained by way of loan from several persons. The Income-tax Officer did not accept the savings out of the agricultural income to the tune of Rs. 1,00,000. The loans from various persons to the extent of Rs. 95,000 were also treated as unexplained. This resulted in an addition of Rs. 1,95,000 in the assessment. In the quantum appeal, the Commissioner of Income-tax (Appeals) confirmed the addition of Rs. 1,00,000 being the unexplained portion of the agricultural income. The addition of Rs. 95,000, representing loans from various persons, was deleted. The assessee as well as the Revenue filed appeals before the Appellate Tribunal. In I. T. A. No. 475/ Coch/1979, the Appellate Tribunal, by order dated September 30,1981, held that two loans amounting to Rs. 45,000 (Rs. 15,000 in the name of Sri. Rama Varma Kochunni Thampuran and Rs. 30,000 in the name of Shri. P. C. Raman Unni) were not satisfactorily proved as also the addition in respect of the agricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return the correct income has not arisen on account of any fraud or gross or wilful neglect on the part of the assessee. Since it was found that the assessee has discharged the onus cast on him, the Tribunal further stated that the assessee has not consciously concealed the income and the Commissioner of Income-tax (Appeals) was justified in cancelling the penalty levied under section 271(1)(c) of the Act. The order passed by the Appellate Tribunal is dated March 6, 1986. The Revenue filed an application under section 256(1) of the Act to refer certain questions of law which, according to it, arose out of the appellate order of the Tribunal. The Appellate Tribunal held, that in disposing of the appeal filed by the Revenue, it adverted to section 271 (1) (c) of the Act along with the Explanation and after considering the entire facts and materials on record, held that the assessee has discharged the burden cast on him and in this view of the matter, it is for the Revenue to prove by positive material that the assessee has consciously concealed his income so as to attract the penal provisions of section 271(1)(c) of the Act which was not done in this case. In the above perspective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the Tribunal placed reliance, had already been considered in the assessment proceedings and disbelieved. We fail to understand as to how a different interpretation could be put on those circumstances in penalty proceedings without the assessee producing any fresh evidence or placing any additional or fresh circumstance in penalty proceedings. Placing heavy reliance on the above observations, counsel for the Revenue emphatically argued that no "fresh material or evidence" was let in by the assessee during the penalty proceedings and if, on the basis of materials available at the assessment stage, the Tribunal upheld the total addition of Rs. 85,500 (Rs. 45,000 on the ground of two loans and Rs. 40,500 in respect of agricultural income), there was no reason to hold that the assessee has discharged the burden cast on him and has proved that the failure to return the correct income has not arisen on account of any fraud or gross or wilful neglect on the part of the assessee. In this view, the Tribunal erred in holding that no penalty is exigible in the instant case. At this juncture, we should state that the Appellate Tribunal sustained an addition of Rs. 85,500 in the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mussadilal Ram Bharose [1987] 165 ITR 14, 19, 21, 22. There is an earlier decision of this court, regarding the nature of proof required to be adduced by the assessee to discharge the burden cast on him in the light of the Explanation to section 271 (1)(c) of the Act, in CIT v. Sankarsons and Co. [1972] 85 ITR 627. The matter has been exhaustively dealt with by two Bench decisions of this court in CIT v. Saraf Trading Corporation [1987] 167 ITR 909 and CIT v. Pawan Kumar Dalmia [1987] 168 ITR 1. Besides, there is a Bench decision of the Gujarat High Court in CIT v. S. P. Bhatt [1974] 97 ITR 440, wherein the decision of this court in CIT v. Sankarsons and Co. [1972] 85 ITR 627 was followed. So, the decision of the Supreme Court in Mussadilal Ram Bharose's case [1987] 165 ITR 14, the decisions of this, court in Sankarsons' case [1972] 85 ITR 627, Saraf Trading Corporation's case [1987] 167 ITR 909, Pawan Kumar Dalmia's case [1987] 168 ITR 1, as also the decision of the Gujarat High Court in S. P. Bhatt's case [1974] 97 ITR 440 have laid down the law applicable to cases such as the one in the instant case. In particular, we would only extract the observations in the earlier Bench de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it in respect of a year subsequent thereto: New materials may produce a change of approach ; the old materials themselves, on a more careful or intelligent analysis, may effect the same result . ." We would respectfully adopt the above observations as our own and as equally applicable in the case of penalty proceedings. In the light of the principles discernible from the decision of the Supreme Court and the earlier Bench decisons of this court referred to above, we are of the view that it was open to the Commissioner of Income-tax (Appeals) as also the Appellate Tribunal to advert to the materials or evidence available during the assessment proceedings afresh and make an independent or closer or more intelligent analysis. That was so done in this case to come to the conclusion that the assessee has discharged the onus cast on him under the Explanation to section 271(1)(c) of the Income-tax Act. On that basis, the Commissioner of Income-tax (Appeals) as also the Appellate Tribunal have concurrently held that the assessee has discharged the onus of proof cast on him and that no penalty is exigible in the instant case. The reasoning and conclusion, in this regard, by the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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