TMI Blog1977 (10) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ng an income of Rs. 20,899 on the turnover of Rs. 5,19,616. This works out to 12.6 per cent. of the gross profit as seen from the books of account. The assessing authorities felt that both the turnover as well as the percentage of profit were too low. The turnover was, therefore, fixed at Rs. 6,79,364 and the percentage of profits was fixed at 18 per cent., with the result, the income-tax to be assessed was determined as on the income of Rs. 66,460. The tax was imposed on that figure. The assessment order has been accepted by the assessee, no appeal having been taken from the order of assessment. Penalty proceedings were then commenced against the assessee under s. 271(1)(c) of the I.T. Act, 1961, which states : " (1) If the Income-tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied in this case. Automatically, the presumption under the Explanation would be attracted. When the Explanation is attracted the assessee will have to prove that its failure to return the correct income did not arise from any fraud or any gross or wilful neglect on its part. There can be no doubt whatever that the burden of proving this is on the assessee. The Kerala High Court has held in CIT v. Sankarsons and Co. [1972] 85 ITR 627 that the degree of proof is not the degree of proof required in a criminal case but the degree of proof required in a civil case, i.e., evidence or circumstances that will probabilise the version put forward by the assessee. In these circumstances, there is no scope for applying the principle laid down by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and also that it cannot be said that in making its estimate the assessee was guilty of gross or wilful neglect ........" The Tribunal observed in the concluding paragraph of its order thus : " Now, the question is whether it can be said that the assessee is guilty of not having declared in the return some income wilfully and before a penalty can be imposed it is our opinion that the burden of showing that the assessee has done so is on the department ........ " It is clear from the extracts that we have made from the order of the Tribunal that the Tribunal has completely misconducted itself and has not entered a finding of fact that is necessary to determine whether the assessee has or has not established that the presumption which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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