TMI Blog1977 (1) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... o be referred by this court are : "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the penalty levied under the provisions of section 271(1)(c) of the Income-tax Act, 1961, for the assessment years 1959-60, 1960-61, 1961-62, 1964-65 and 1965-66 ? 2. Whether the conclusion of the Appellate Tribunal that there was no concealment of income by the assessee within the purview of section 271(1)(c) is a reasonable view to take on the facts and in the circumstances of the case? For the assessment year 1963-64, the following two questions have been referred by the Tribunal as directed by this court : "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the penalty levied under the provisions of section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 1963-64 ? 2. Whether the conclusion of the Appellate Tribunal that there was no concealment of income of the assessee within the purview of section 271(1)(c) is a reasonable view to take on the facts and in the circumstances of the case ?" The facts in relation to each of these questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Against these orders levying penalty, the assessee appealed to the Appellate Tribunal. The Tribunal had before it the appeals not only for these three years, but also for the other assessment years to which we have made reference. But as far as these three years are concerned, the Tribunal dealt with them separately in its order. The finding of the Tribunal was that with reference to these three years, the levy of penalty under section 271(1)(c) was not proper and, therefore, cancelled these penalties. Aggrieved by this conclusion of the Tribunal, the Commissioner of Income-tax applied for a reference and got further directions from this court in the manner mentioned above. The question that arises with reference to these years is whether the assessee has concealed the particulars of his income or filed inaccurate particulars therof. The Income-tax Officer made an estimate of the income for these years in the following manner. He arrived at a sum of Rs. 1,98,000 as net wealth as on March 31, 1961. He deducted therefrom a sum of Rs. 27,000 being the estimate of household expenses for the three years at Rs. 750 per month on an average. He further estimated an addition of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y here fully. The department has not brought any evidence to show that the additional income assessed for these years was the undisclosed business income of the assessee and that the assessee was guilty of concealing Rs. 14,500 for each of the assessment years 1959-60 and 1960-61 and Rs. 16,500 for the year 1961-62. It can well be that the assessee concealed the entire income of Rs. 45,500 (not necessarily from the disclosed business) in one assessment year or in two assessment years or even in three assessment years taken by the Income-tax Officer, but it is quite a different proposition. These are matters of speculation and fall outside the ambit of penal provisions. The penalties levied for three years are, therefore, cancelled. The conclusion of the Tribunal as will be clear from the above passage is that the Income-tax Officer has resorted to a guess work with reference to these three years. There is absolutely no material on record to show that the assessee earned the said sum of Rs. 14,500, Rs. 14,500 and Rs. 16,500 in each of these three years, namely, 1959-60, 1960-61 and 1961-62, respectively. Therefore, the Tribunal was justified in its view that in the absence of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the earlier three years, which we have dealt with already. For these three years the assessments themselves have been made not by spreading over any unexplained accretion by resorting to any guess work. The Income-tax Officer himself had actually arrived at the estimate of the business income for each of these three years by applying a rate of 20 per cent. to the estimated turnover. With reference to these years, the Tribunal observed in its order as follows : "Though a reference is made to unexplained accretion to wealth, the additional income estimated is not based on any definite findings on the part, of the Income-tax Officer showing clearly what was the income concealed for each of the years in question. An overall comparison is made for a period of 5 years including the assessments for 1962-63 at one end and 1966-67 at the other. A certain figure is arrived at as the unexplained accretion to wealth in this period. But then no attempt is made to apportion with reference to any definite evidence as to which particular assessment year this pertained or could have pertained. Because the Income-tax Officer had no specific evidence, he had chosen to make a routine estimate of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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