TMI Blog1979 (7) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... plates imported under licence issued under the Kerala Small Scale Industries Scheme. The assessment year, with which we are concerned, is 1961-62, and for the accounting year ended on May 31, 1960, the assessee filed a return of income on May 30, 1962, showing the total income as Rs. 23,947. This worked out to a gross profit of 31.7% on a turnover of Rs. 1,04,604. Out of the tin plates purchases of the year ended May 31, 1960, relevant to the assessment year 1961-62, the assessee had deposited 38 tons of tin sheets on November 3, 1959, with the State Bank of India as security for key loan facilities. The stocks were released by the bank between March 12, 1960, and May 14, 1960, in three instalments, the last being 24.5 tons released on May 14, 1960. On November 26, 1965, the assessee produced the books of account for the year ended May 31, 1960, and these were examined by the ITO. The officer found that there were manipulations in the accounts to a considerable extent by short-crediting sales. The day book and the ledger were impounded and also the file containing the sale bills. By letter dated December 9, 1965, the ITO wrote to the assessee about the serious irregularities discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him, a sum which shall not be less than, but which shall not exceed twice, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income : Provided that, if in a case falling under clause (c), the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccuaate particulars have been furnished exceeds a sum of twenty-five thousand rupees, the Income-tax Officer shall not issue any direction for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner. Explanation 1.--Where in respect of any facts material to the computation of the total income of any person under this Act,-- (A) such person fails to offer an explanation or offers an explanation which is found by the Income-tax Officer or the Appellate Assistant Commissioner or the Commissioner (Appeals) to be false, or (B) such person offers an explanation which he is not able to substantiate, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-clause (iii) of clause (a) of sub-section (1) of section 153 a return of his income which he is required to furnish under section 139 in respect of any assessment year commencing on or after the 1st day of April, 1974, and, until the expiry of the period aforesaid, no notice has been issued to him under sub-section (2) of section 139 or section 148 and the Income-tax Officer or the Appellate Assistant Commissioner or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148. Explanation 4.--For the purposes of clause (iii) of this sub-section, the expression " the amount of tax sought to be evaded ",-- (a) in any case where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished exceeds the total income assessed, means the tax that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he observations of the Supreme Court in Anwar Ali's case [1970] 76 ITR 696. While discussing the scope of s. 28 of the Indian I.T. Act, 1922, the court observed : " It must be remembered that the proceedings under section 28 are of a penal nature and the burden is on the department to prove that a particular amount is a revenue receipt. It would be perfectly ligitimate to say that the mere fact that the explanation of the assessee is false does not necessarily give rise to the inference that the disputed amount represents income. It cannot be said that the finding given in the assessment proceedings for determining or computing the tax is conclusive. However, it is good evidence. Before penalty can be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. " Counsel for the assessee stressed the emphasis laid on the element of " conscious concealment " as the ingredient attracting liability under the section. In CIT v. J. K. A. Subramania Chettiar [1977] 110 ITR 602, the Madras High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e section, and not a case of a return having been practically forced on the assessee when pressed by events and circumstances such as what are disclosed herein and under the imminence of imposition of a penalty. We think the submission made by the counsel for the revenue is correct. We have already detailed the facts and circumstances. The officer had issued summons to examine two persons mentioned by the assessee. It was then that the assessee wrote on December 29, 1965, to drop the examination of the two persons and admitting the discrepancy between the stock declared and the actual stock. In the circumstances, it cannot be held that the revised return was one under s. 139(5) of the Act, and the Tribunal was not wrong in not having taken the revised return into account. Noticing the contention of the counsel for the assessee, the Tribunal ruled to this effect, with reference to the Bombay decision in Vadilal Ichhackand. v. CIT [1957] 32 ITR 569. It was there pointed out that the assessee's contumacy in deliberately having omitted to file an original return disclosing the correct and accurate particulars cannot be got rid of by merely filing a revised return and that penalty would ..... 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