TMI Blog1986 (10) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... , amounting to Rs. 1,07,733 and did not record the transactions in question in its account books. Consequently, he issued notice under section 148 of the Act for the assessment year 1964-65. In response to this notice, the assessee filed a return showing the same income of Rs. 17,122 as originally returned by it. The contention of the assessee before the Income-tax Officer was that the amount received by the employees of the Hindu undivided family and one of the members, in fact, belonged to Sri Ram, in his individual capacity, and the said amount did not belong to the Hindu undivided family. The Income-tax Officer, however, did not believe the explanation furnished by the assessee-Hindu undivided family and by taking an initial investment made outside the books at Rs. 10,000 he calculated the profit on the same at Rs. 7,500 and thereby made an addition of Rs. 17,500 to the total income of the assessee-Hindu undivided family. Since Sri Sriram had admitted before the Income-tax Officer that the amount of Rs. 1,07,733 belonged to him, in his individual capacity, and did not belong to the Hindu undivided family. The Income-tax Officer, acting on the basis of the aforesaid admission, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer, the assessee had written a letter dated July 14, 1970, addressed to the Income-tax Officer in the following words. " That in connection with previous proceedings in respect of the abovementioned payments against the erstwhile Hindu undivided family, it was categorically stated by all the disrupted members of the said Hindu undivided family that the erstwhile Hindu undivided family had nothing to do with the same and that the relative transactions had actually been done by Sri Ram in his individual capacity. That Sri Ram having accepted the abovementioned transactions, proceedings against him were started in regular manner and relevant materials were produced before your honour to prove the source of investment and the manner in which he had managed these transactions. That there is nothing on record to warrant the assumption that these transactions were not of Sri Sriram done by him in his individual capacity but were of the erstwhile Hindu undivided family. " It is worthwhile to notice that even in response to the notice under section 148 of the Income-tax Act, the assessee had filed a return showing the same income of Rs. 17,122 as originally returned by it. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid findings of fact, we have to proceed on the basis of the findings recorded by the Tribunal. In that event, it cannot be held that the assessee had concealed its income so as to render itself liable for penalty. As held by the Supreme Court in CIT v. Ashoka Marketing Ltd. [1976] 103 ITR 543, a finding recorded by the Tribunal regarding concealment of income is a finding of fact and is binding on the High Court. Thus, the argument advanced on behalf of the Commissioner of Income-tax that the amount in question was the concealed income of the assessee has no substance and is liable to be rejected. The next argument raised on behalf of the applicant is that in view of the Explanation to section 271(1)(c) of the Income-tax Act, there is presumption in law that the assessee had concealed the income and, therefore, the Tribunal was not right in law in deleting the penalty in question. The Explanation to section 271(1)(c) in so far as it is relevant for our purpose and as it stood at the relevant time in the year 1972, namely, at the time when the penalty was imposed by the Inspecting Assistant Commissioner, stood as under: " Explanation.-Where the total income returned by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Saeed Ahmad v. IAC [1971] 79 ITR 28. That being so, after the entire material had been placed before the Tribunal by both the parties, the question of burden of proof under the Explanation lost its importance and ultimately everything depended upon the findings recorded by the Tribunal in that behalf. Moreover, the burden to be discharged under the Explanation was a negative one. Therefore, in our opinion, it was open under the law to the Tribunal to consider the totality of the facts and circumstances of the case and arrive at a finding as to whether the assessee had been able to prove that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part. The findings of the Tribunal, summarised above, clearly show that the Tribunal had held that there was no evidence to show that the assessee had concealed the amount in question. On the other hand, it had all along protested that it was the income of Sri Sriram, an individual and not the income of the assessee-Hindu undivided family, and that there was no mens rea in the present case. In this view of the matter, the second submission advanced on behalf of the Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Company [1976] 102 ITR 830 (AP), the assessee, while denying the allegation as to suppression of income, pleaded his inability to adduce evidence in support of its explanation and agreed to the addition in order to purchase peace with the Department. The Appellate Assistant Commissioner of Income-tax set aside the penalty and on an appeal filed by the Revenue, the Tribunal held that the probabilities of the case speak both for and against the assessee and that it is not as if the entirety of the circumstances relied upon by the Revenue reasonably point to the conclusion that the amount added in the assessment represented the income of the assessee and that the assessee had consciously concealed the same. This case also, in our opinion, is of no avail to the Department in the present case. In CIT v. Ashoka Marketing Ltd. [1976] 103 ITR 543, the Supreme Court has held that on the facts, whether or not the assessee had concealed his income was a question to be decided on the facts of the case, and that since in that case the Tribunal had, after accepting the agreement as true, deleted the penalty, no question of law really arose from the order of the Tribunal. This case also, in o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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