TMI Blog1987 (7) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Tribunal was correct in law in cancelling the penalty of Rs. 20,000 imposed under section 271 (1)(c) of the Income-tax Act, 1961 ? " The facts of the case, in a nutshell, are that in proceedings for determination of assessment, a best judgment assessment was made by the Income-tax Officer. Ultimately, the matter was taken up before the Tribunal and the Tribunal confirmed the total income of Rs. 73,407 determined by the Income-tax Officer. The assessee, in its return, had for the relevant assessment year, disclosed its total income as Rs. 24,387. Thus the total income disclosed by the assessee was less than 80 per cent. of the total income assessed and the provisions of the Explanation to section 271(1)(c) of the Income-tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e finding as to whether the initial onus cast upon the assessee had been discharged by it or not, is a finding of fact and on that finding no question of law arises. Having considered the respective submissions made by counsel for the parties, we are of opinion that the submission made by learned counsel for the Revenue that the order of reversal passed by the Tribunal as well as its finding that the assessee had discharged the initial onus, is based on no other circumstance or material, except the circumstance that it was a case of a best judgment assessment. The question which falls for consideration is whether in law it was possible for the Tribunal to hold that the case of a best judgment assessment stands on a different footing in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se where, after decision of the quantum appeal, penalty proceedings were initiated, where the assessee had a chance of furnishing "fresh material or evidence to prove availability of funds. No attempt was made by him and no fresh material was produced. In this background, it was pointed out that the presumption raised by the Explanation to section 271 (1)(c) of the Act was not displaced by the assessee by showing that there was no fraud or gross or wilful neglect on his part it was held that, in these circumstances, the authorities below had no option but to hold that under the Explanation, the assessee would be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purpose of claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in returning the income and, in these circumstances, it could be said that since the finding recorded by the Tribunal setting aside the order imposing penalty was based on material produced on record, it was a finding of fact. In the instant case, as seen above, the finding is based on no material whatsoever, except the circumstance that it was a case of best judgment assessment. The circumstance has been found to be of no consequence in the eye of law. Lastly, reliance was placed by learned counsel for the assessee on decision of the Rajasthan High Court in Addl. CIT v. Thahrayamal Balchand [1980] 124 ITR 111. In that case also, there was material on record and it was on consideration of that material that the finding in regard to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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