TMI Blog1982 (4) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed an addition of Rs. 30,000 for unexplained investment in property, whether the Income-tax Appellate Tribunal was right in holding that the assessee could not be deemed to have concealed the particulars of its income in terms of the Explanation to section 271 (1) ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was, legally justified in cancelling the penalty imposed upon the assessee in terms of the Explanation to section 271(1)(c) of the Income-tax Act, 1961 ? " The assessee, Mangalsen Mohanlal a HUF, was engaged in the business of manufacture and sale of Boora and Batasa. It had also income from sale of controlled sugar. For the assessment year 1967-68, the assessee disclosed its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Explanation thereto and referred the case to the IAC under s. 274(2) Pursuant to the notice the assessee submitted a written statement in which it was stated that there was no evidence on record to show that the assessee had concealed the particulars of its income or had deliberately furnished inaccurate particulars of the same and as such, the notice was not warranted, that the ITO had estimated the business income at Rs. 20,000 as against Rs. 9,000 disclosed by the assessee which on appeal had been reduced to Rs. 11,000 and on that account no question of penalty arose. As regards the purchase of two shops it was urged that they had been separately purchased by the karta's sons, Brij Mohan and Banwari Lal, for Rs. 9,000 each. Their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r observing : " It is clear from a perusal of the order passed by the Tribunal in the quantum appeal that the additions have been sustained on the ground that the assessee had not been able to explain the sources of the expenditure which, according to the income-tax authorities the family incurred in respect of certain flats. It is also the case of the assessee that the two shops in, question did not belong to the family but belonged only to two individual coparceners. This explanation has not been believed. It is settled law that in respect of additions made in circumstances similar to the assessment, there could be no levy of penalty under section 271(1)(c)of the Income-tax Act, 1961 [Commissioner of Income-tax v. Anwar Ali [1970] 76 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether even after the insertion of the Explanation the decision in Anwar Ali's case [1970] 76 ITR 696 (SC) is or is not good law, in our opinion, the Explanation has brought about a material change in the situation. Under s. 271(1)(c) of the I.T. Act, 1961, the position, of course, was that the (penalty) proceedings under the Act were quasicriminal in nature and the onus was on the department to prove that the assessee concealed the income and furnished inaccurate particulars of the income in respect of the same and that it did so deliberately and further that the findings given in the assessment proceedings were admissible and good evidence but did not constitute conclusive proof of concealment or furnishing of inaccurate particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his income or furnished inaccurate particulars of such income. This is, however, a rebuttable presumption. The assessee can discharge the onus by showing that the failure to return the correct income did not arise from any fraud, or any gross or wilful neglect on his part. This onus is of a negative nature. Further, the extent of the onus is as in a civil case and certainly not as in a criminal case where the prosecution is required to establish the guilt of the accused beyond all reasonable and probable doubts. The assessee can discharge this onus by relying on direct or circumstantial evidence. He can rely on the evidence given and the circumstances which obtained in the assessment proceedings as also furnish fresh evidence in penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aled income of the assessee for the year under consideration and that merely because the assessee's explanation was rejected in the assessment proceedings, it would not mean that it was guilty of concealment of income or furnishing inaccurate particulars in respect of the same. There is not a whisper in the order of the Tribunal to show that the provisions of the Explanation to s. 271(1)(c) was in the background of its mind when it was considering this case. All that was in the background of its mind was the decision in Anwar Ali's case [1970] 76 ITR 696 (SC). It appears to be oblivious of the fact that the Explanation to s. 271(1)(c) was attracted to the case and if so, what was its effect. The IAC had in a detailed order considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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