TMI Blog1980 (9) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961, on the assessee for the A. Y. 1960-61, was valid in law ? (3) Whether, on the facts and in the circumstances of the case, the levy of penalty, at 25% of the tax avoided, u/s. 271(1)(c) of the Income-tax Act, 1961, on the assessee for the A. Y. 1961-62, was valid in law ? " The material facts, giving rise to this reference, are briefly as follows : The assessee is a contractor and the assessment years in question are 1959-60, 1960-61 and 1961-62. In the relevant assessment years, the assessee had undertaken contracts for the construction of certain works. The assessee claimed that out of the total receipts in connection with those contracts, he was entitled to 2% of the receipts by way of profits as he had assig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the order of the Tribunal, the assessee submitted an application for making a reference to this court, but that application was rejected. The assessee thereupon submitted an application to this court under s. 256(2) of the I.T. Act, 1961. That application was allowed and the Tribunal was directed to refer the aforesaid questions of law to this court and state the case. That is how the aforesaid questions have been referred to us for our opinion. Having heard learned counsel for the parties, we have come to the conclusion that this reference must be answered in the negative and in favour of the assessee. Before we proceed to appreciate the contentions advanced on behalf of the parties, it would be useful to refer to the following observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid observations of the Supreme. Court, it is clear that the finding arrived at by the Tribunal in the assessment proceedings cannot be regarded as conclusive for the purposes of penalty proceedings. The authorities are expected to consider afresh all the materials available, either produced at the assessment stage or later, in the penalty proceedings in the light of the burden to prove, resting on the revenue, whether the assessee had consciously concealed the particulars of his income. In the instant case, the Tribunal, in the penalty proceeding, based its conclusion merely on the basis of the finding given in the assessment appeals. This approach cannot be held to be permissible in the light of the aforesaid decision of the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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