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TMI Blog1982 (7) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... the burden was upon the Department to prove so and consequently rightly deleted the penalties in question ? " The assessee is an HUF carrying on business in grain and cotton, etc. For assessment years 1966-67 and 1967-68, it filed a return disclosing an income of Rs. 2,600 on estimate basis. The ITO issued a notice under s. 143(2) of the Act, with which the assessee failed to comply, and, therefore, best judgment assessments were completed for each of the two years under s. 144 of the I.T. Act. The total income computed by the ITO for each year was Rs. 18,100. The assessee appealed against the assessments and the AAC reduced the income to Rs. 11,700 and Rs. 15,100 respectively. The ITO initiated penalty proceedings and as the minimum penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt penalty altogether, but so far as the charge of concealment is concerned or of gross or wilful neglect of the assessee is concerned, we must come to the conclusion that on the facts of the case, the penalty provisions under section 271 (1)(c) are not attracted, in either of these two appeals. We, therefore, vacate the orders of penalty and allow the appeals." The Department sought a reference under s. 256(1) of the I.T. Act but the Appellate Tribunal rejected the application. The Department then filed an application under s. 256(2) of the Act before this court and this court directed the Appellate Tribunal to state the case and refer the aforesaid question for our decision. It may be noted that the Appellate Tribunal placed complete re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned counsel for the assessee vehemently argued that Explanation to s. 271(1)(c) of the Act was very much in the mind of the Appellate Tribunal while it allowed the appeals and cancelled the penalties. He invited our attention to the following observations in the Tribunal's order : " After all an estimate is an estimate and the circumstance that the estimate given by the assessee is rejected and is substituted by another estimate by the departmental authorities and also by the Tribunal will not, ipso facto, go to show that the assessee is guilty either of fraud or gross or wilful neglect and, therefore, guilty of concealment." Learned counsel urged that the use of the words " guilty either of fraud or of gross or wilful neglect " ..... X X X X Extracts X X X X X X X X Extracts X X X X
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