TMI Blog1980 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute relates to the assessment year 1970-71. The assessee was carrying on business of assembling pumping sets and manufacturing of canal gates. He filed a return showing an income of Rs. 14,768. In the course of inquiry the ITO had found that the assessee had not incorporated accounts relating to 27 vouchers in his account books, and that an amount of Rs. 2,000 paid in cash to M/s. Machinery Spares, Ghaziabad, on March 17, 1970, was recorded in his account books subsequently, i.e., on March 18, 1970. Some other defects were noticed with the result that the book version was rejected, and the income estimated at Rs. 30,000. Proceedings for levy of penalty under s. 271(2) of the I.T. Act, 1961, was also initiated. The estimate of income was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of Rs. 2,500, were not recorded in the account books of the assessee. On the basis of this, the Tribunal estimated the concealed income at Rs. 3,000, taking into account the value of the purchases represented by these vouchers and estimated the profit thereon. Lt, as such, reduced the penalty to Rs. 4,500, being 150% of the concealed income which was estimated by the Tribunal to be Rs. 3,000. The Department had contended that for the purposes of imposition of penalty the estimate of concealed income made in the quantum appeal, in cases covered by the Explanation to s. 271, has, as a matter of law, to be accepted for fixing the amount of penalty. This contention was, in our view, rightly rejected by the Tribunal. It is settled that proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be covered by s. 271(1)(c), unless the assessee proves that he was not guilty of any fraud or any gross or wilful neglect in filing the return of his income. The Explanation exhausts itself once this purpose is achieved, and does not create any further fiction to the effect that the assessed income has to be taken as the correct income for the purposes of imposition of penalty under s. 271(1)(c)(iii). For purposes of fixing the quantum of penalty under s. 271(1)(c)(iii), the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has to be found by the authority concerned. In doing so it may or may not accept the amount assessed as the concealed income of the assessee in the q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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