TMI Blog1983 (1) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 27l(1)(c) of the Income-tax Act, 1961 ? " From the statement of the case it appears that in the course of the assessment proceeding for the assessment year 1963-64, the ITO found that a sum of Rs. 20,000 in all had been credited in the name of the partners of the assessee-firm. On the failure of the assessee to produce any evidence in support of the genuineness of these cash credits, the ITO added the sum of Rs. 20,000 to its income as income from undisclosed sources. The assessee did not challenge this addition in appeal before the AAC. Thereafter, a notice was issued to the assessee as to why penalty under s. 271(1)(c) of the Act be not imposed against the assessee. A written explanation was submitted on behalf of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al onus to show that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on the part of the assessee, is on the assessee. But, it has to be borne in mind that whenever the assessee is called upon to submit such an explanation he is required to prove a negative fact. It was pointed out by this court in the case of CIT v. Patna Timber Works [1977] 106 ITR 452 that ordinarily and generally there cannot be any direct evidence to prove such facts. In that context it was observed as follows (p. 462): " The assessee merely has to place materials of the primary facts or the circumstances which in all reasonable probability would show that he was not guilty of any fraud or gross or wilful neglect. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 980] 122 ITR 832. Coming to the facts of the present case, from the order of the IAC it appears that the assessee had filed a written explanation pursuant to the notice regarding the imposition of penalty. The IAC has neither accepted the said explanation nor rejected it in so many words. He has imposed penalty only on the ground that " the assessee had not contested the cash credits before the AAC ". Thereafter, he has observed : " In the circumstances, I am led to the irresistible conclusion that the assessee is guilty of concealment and also of furnishing inaccurate particulars of income." This fact was taken note of by the Tribunal while allowing the appeal of the assessee. The Tribunal has observed as follows: " The IAC, in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l onus placed on it. Once the IAC has not rejected the said explanation, the Tribunal was justified in assuming that the assessee had discharged the initial onus and, thereafter, it was for the Department to produce materials or to show circumstances on the basis of which it could have been held that an incorrect return was filed by the assessee as a result of fraud, gross or wilful neglect. The IAC has come to the conclusion against the assessee only for the reason that he had not challenged the addition of the cash credit amount in the assessment. In our opinion, merely on this circumstance, a fraud or gross or wilful neglect on the part of the assessee cannot be inferred. Bench of this court in the case of CIT v. Binod Company [1980] 122 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
