TMI Blog1975 (1) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. of the income assessed he initiated penalty proceedings under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "). As the minimum imposable penalty exceeded Rs. 1,000, the case was referred to the Inspecting Assistant Commissioner of Income-tax as required by the proviso to section 274(2) of the Act. Before the Inspecting Assistant Commissioner it was represented on behalf of the assessee that he had not committed any concealment of income and his profit was less because he was a wholesale dealer. It was also pleaded that in any case the assessee had not been guilty of any fraud or gross or wilful neglect and, as such, no penalty is called for. The Inspecting Assistant Commissioner of Income-tax did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee is enhanced by the Income-tax Officer the penal provision is not automatically attracted. The penal provision is applicable only if the enhancement is on account of some income which the assessee is found to have earned and concealed. This proposition is now well settled after the decision of the Supreme Court in the case of Commissioner of Income-tax v. Anwar Ali [1970] 76 ITR 696, 700, 701 (SC). In that case the assessee was a partner of a firm. During the course of assessment proceedings for the year 1947-48, the Income-tax Officer discovered an undisclosed bank account of the assessee where a cash deposit of Rs. 87,000 had been made. He was asked to explain the source of the deposit. The assessee's explanation that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." In the end the Supreme Court observed : " In the present case, it was neither suggested before the High Court nor has it been contended before us that, apart from the falsity of the explanation given by the assessee, there was cogent material or evidence from which it could be inferred that the assessee had concealed the particulars of his income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount was a revenue receipt " and agreeing with the High Court the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by an assessee is less than 80 percent. of the income assessed as reduced by the expenditure bona fide claimed by the assessee and disallowed by the Income-tax Officer it shall be deemed to be a case of concealment unless the assessee proves that the difference is not due to fraud or gross or wilful neglect on his part. This Explanation lays down a rule of evidence and the onus which ordinarily lies upon the department has been shifted to the assessee in cases to which the Explanation applies. It is true that the Explanation will cover even the cases of estimate or the best judgment assessment but nevertheless a finding has to be recorded that the difference in the income returned and the income assessed is due to the fraud or gross and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o justification for imposing penalty because the revenue had not established that what was added by them in the assessment represented the income of the assessee. The finding recorded by the Tribunal that the assessee was not guilty of fraud or gross or wilful neglect is a finding of fact and having regard to the facts and the circumstances of the case we are not prepared to interfere with it. A similar view was taken by this court in Commissioner of Income-tax v. Harnam Singh and Co. [1977] 106 ITR 532 (All). Our attention was drawn to a recent decision of another Division Bench of this court in Addl. Commissioner of Income-tax v. Swatantra Confectionary Works [1976] 104 ITR 291 (All). There the Bench disagreed with the view of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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