TMI Blog1989 (1) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the assessee had not accounted for all the passenger tax stamps purchased by it during the assessment years in question, the unaccounted for passenger tax stamps for 1966-67 being of the value of Rs. 33,819 and for 1968-69 of Rs. 12,687. The explanation furnished by the assessee with regard to the discrepancy between the passenger tax tickets purchased and accounted for was not accepted by the Income-tax Officer and, consequently, a sum of Rs. 90,000 was added to the receipts declared by the assessee for the year 1966-67 and Rs. 52,000 for 1968-69. Penalty proceedings under section 271(1)(c) of the Act were also initiated against the assessee. On appeal, the Appellate Assistant Commissioner upheld the addition of Rs. 90,000 for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Lordships of the Supreme Court in CIT v. Khoday Eswarsa Sons [1972] 83 ITR 369 have held that penalty proceedings being penal in character, the Department must establish that the receipt of the amount in dispute constitutes income of the assessee. Apart from the falsity of the explanation given by the assessee, the Department must have before it, before levying penalty cogent material or evidence from which it could be inferred that the assessee had consciously concealed the particulars of its income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount is a revenue receipt. Since the evidence to prove mens rea on the part of the assessee is wanting in this case and the additions have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umptions that straightaway arise being: (i) that the amount of the assessed income is the correct income and it is, in fact, the income of the assessee himself ; (ii) that the failure of the assessee to return the aforesaid correct assessed income was due to fraud; or (iii) that the failure of the assessee to return the aforesaid correct assessed income was due to gross or wilful neglect on his part. Where, however, the variation between the returned income and the assessed income was less than 20 per cent., the case would be out of the net of the Explanation and would continue to be covered by the law as it existed prior to the amendment of section 271(1)(c) of the Act by the Finance Act, 1964. This view of the Full Bench in Vish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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