TMI Blog1976 (12) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... tions made were reasonable and were warranted in the circumstances. According to it, the explanation given by the assessee that it secured the funds for the purpose of purchasing gold from its branch office was not worthy of credence. It not merely not accepted the bare explanation furnished by the assessee, but on a further probe found that it was impossible for the principal office to have availed itself of all the available cash at its branches so as to make the alleged purchases for which the principal office did not have the necessary funds. Having thus negatived the bare explanation of the assessee and having applied its mind to the entry in the books of account and bearing in mind the surrounding circumstances, the Tribunal came to the conclusion that the assessee was having some secret funds which it was retaining. It was in those circumstances that the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal estimated the income to be added at Rs. 50,000 for one activity of the assessee and another sum of Rs. 10,000 for a different activity of his which also suffers from the same infirmity as above. As regards the second addition of Rs. 10,000, the explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealed or deliberately concealed income, nor could it be reasonably inferred from the discussion in the orders of the Tribunals below that they applied their mind independently about any overtness in the avoidance of tax. Reliance is placed upon State of Orissa v. Maharaja Shri B. P. Singh Deo [1970] 76 ITR 690 (SC), in which the Supreme Court laid down or reiterated the well-known principle that mere rejection of the explanation by an assessee in the course of the assessment proceedings of the revenue would not automatically lead to the exercise of power to levy penalty. On the other hand, counsel for the revenue would say that even at the original stage the conduct of the assessee was discussed and additions were made only because of an attempt to consciously conceal assessable income on the part of the assessee. Another contention is that as the Tribunal rested its conclusion on appreciation of facts, no interference is called for by this court exercising jurisdiction under section 66(1) of the Indian Income-tax Act, 1922, equal to 256(1) of the Income-tax Act of 1961, which is in the nature of advisory jurisdiction. It is by now well settled that the scope of interference b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. It is in this sense that the burden is cast on the revenue to establish prima facie that there has been a conscious concealment and a deliberate avoidance resulting in a contumacious activity by the assessee in the course of the proceeding. If on the record we have that much of material to prove such wantonness on the part of the assessee to avoid tax and thus evade tax, then the assessing officers in the first instance would be justified in giving the clue for the exercise of the penal power at a later stage by pointing out in their respective orders that there has been such a supine indifference on the part of the assessee to avoid tax. It is, therefore, necessary for us to see in the instant case whether in the stream of assessment proceedings, the assessing officer did make. the position clear even at that stage that this is a case in which the assessment proceedings should not end as such, but the penalty proceedings should begin as soon as the former ends. We have no hesitation in holding that in the instant case there is sufficient material for us to conclude that there are findings of conscious concealment and deliberate avoidance of assessable income by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of Income-tax [1956] 30 ITR 181 (SC). That was a case where the persons who gave the affidavits were not cross-examined and there is no indication in the judgment to show that the department wanted the deponents to be cross-examined. Having regard to the finding of fact in the assessment proceedings and the nature of the concealment which is the basis for the levy of penalty, we are unable to agree with Mr. Kareem that there was no justification for the levy of penalty as made by the revenue and accepted by the Tribunal. The reference is, therefore, answered against the assessee and the revenue will be entitled to its costs. Counsel's fee Rs. 250. T.C. No. 348 of 1970 relates to the assessment year 1959-60. Though four items of credit in the books of the assessee were involved we are now concerned with only two sums which were added on to the assessable income. The first one is the sum of Rs. 5,750 which was a credit in the name of A. K. Kadar Ali and another sum of Rs. 11,512.63 which related to the purchase of gold out of cash not accounted for. As regards the sum of Rs. 5,750 the Tribunal considered the order of the Income-tax Officer and found that the entrie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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