TMI Blog1985 (10) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... n 271(1)(c) ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that penalty under the Explanation to section 271(1)(c) was exigible in sustaining the penalty of Rs. 30,600 The facts in brief which are relevant for answering the above questions of law proceed like this. Firm M/s. Basanta Mal Tilak Ram, Ludhiana (hereinafter called "the assessee") is a registered Firm. It carries on business in foodgrains and other items like wheat, cotton seeds, groundnut, etc. It also deals in cast iron scraps. It filed its return of income on September 2, 1968, for the assessment year 1968-69, previous year ending on March 31, 1968, declaring business income at Rs. 13,412 and speculation loss at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 of the two credits as the income of the assessee from undisclosed sources. The assessee had shown in his account books a sum of Rs. 600 having been paid as interest to M/s. Bharat House, which was also treated as unsubstantiated. The Income-tax Officer, Special Circle, Ward-E, Ludhiana therefore, made an addition of Rs. 30,600 to the income returned by the assessee and made the assessment, accordingly. The assessee preferred an appeal before the Appellate Assistant Commissioner, which was dismissed vide his order dated February 5, 1973. On a further appeal to the Income-tax Appellate Tribunal, the assessee was granted partial relief with regard to the allowance of speculation loss of Rs. 2,264, with which we are not concerned in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that till May, 1972, there was only one Inspecting Assistant Commissioner, Ludhiana Range at Ludhiana However, vide letter dated May 3, 1972, the Government of India, Ministry of Finance, New Delhi, conveyed the sanction of the President of India to the conversion of one of the two posts of the Appellate Assistant Commissioners, Amritsar, into that of Inspecting Assistant Commissioner (Central) with years at In pursuance of the aforesaid letter, the Commissioner of Patiala vide his letter dated 17/18th May, 1972, passed an order new range known as Inspecting Assistant Commissioner (Central), Ludhiana had been created at Ludhiana with effect from June 1, 1972. The Commissioner of Income-tax by another letter of the same date passed an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made the assessment in the instant case and initiated the penalty proceedings was redesignated as Central Circle VII, Ludhiana, and he came under the jurisdiction of the Inspecting Assistant Commissioner (Central), Ludhiana. Accordingly, the Inspecting Assistant Commissioner (Central), Ludhiana, issued a notice under section 274(2) read with section 271(1)(c) of the Act to the assessee, who filed three letters dated February 18, 1874, March 15, 1974, and March 18, 1974, reiterating that the credits amounting to Rs. 30,000 were in respect of the loans raised by it from M/s. Bharat House and pleaded that the penalty proceedings may be dropped. The Inspecting Assistant Commissioner did not accept the assessee's contention and held that in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Inspecting Assistant Commissioner, Ludhiana Range, Ludhiana, had the jurisdiction over the said Income-tax Officer. Later on, a new Range known as Inspecting Assistant Commissioner of Income-tax (Central), Ludhiana, was created with effect from June 1, 1972, and by two separate orders of the Commissioner of Income-tax, Patiala, dated July 1, 1972, the Special Circle, 'E' Ward, Ludhiana, was redesignated as Central Circle VII, Ludhiana, and the Inspecting Assistant Commissioner (Central), Ludhiana, was to exercise jurisdiction over all the Central Circles at Ludhiana and Amritsar. The penalty proceedings were thus rightly finalised by the Inspecting Assistant Commissioner (Central), Ludhiana, who had the jurisdiction over the matter. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the levy of penalty so as to shift the burden of proof from the Department on to the assessee in the class of cases where the returned income of the assessee was less than 80% of the assessed income. It is now settled by the aforesaid Full Bench decision of this court that the Legislature deleted the word "deliberately" in order to bring it in harmony and in consonance with the intent and purpose of the Explanation added to the said section. As long as the word "deliberately" existed in clause (c), a conscious mental element was required to be established thereunder and inevitably the burden of proving thereof was on the Department. When the Legislature contemplated a reversal or a change in the burden of proof by the addition of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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