TMI Blog1974 (5) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. M. Motors 1,500 3-7-1960 M/s. Allied Engineers 3,000 -------------------- 20,000" ------------------- The assessee explained that advances aggregating Rs. 20,000 had been given to these parties in the sundry advances account, which on being received back during the relevant previous year were credited in the account. As this explanation was not considered proper and no further explanation could be rendered, the assessee surrendered these amounts voluntarily to be taxed as its income. The assessee wrote to the Income-tax Officer on January 20, 1961, in the following terms : "We are unable to render proper explanation of the credits in the under-noted accounts, which you may treat as part of the taxable income: Rs. 1. Shri S. P. Khanna 1,500 2. M/s. Mackinnon Mackenzie Co. 14,000 3. M/s. M. Motors 1,500 4. M/s. Allied Engineers 3,000 ------------------ 20,000 -------------------- The above additions are being voluntarily made and we trust you would be kind enough not to levy any penalties in this respect." The Income-tax Officer also found an item in the foreign sales account in respect of a bill for Rs. 14,115, which was revers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling the penalty. According to sub-section (1) of section 271, if the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings is satisfied that any person, inter alia, has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay a certain sum by way of penalty in addition to any tax payable by him. It is the Income-tax Officer or the Appellate Assistant Commissioner, who has to satisfy himself first about the applicability of this section. The Explanation to the sub-section is then important and provides that where the total income returned by any person is less than eighty per cent. of the total income as assessed (suitably reduced by any bona fide expenditure, which may have been disallowed), such person shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars unless he proves that failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. The deeming provision raises a presumption in law about the concealment of the income or about the inaccuracy of its particulars whenever th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were adults. The agent-firm was held to be spurious, set up for diverting large portion of income and the assessee agreed to the inclusion of Rs. 39,121 in its total income. No inadvertence was pleaded. On the other hand, it was conclusively established that the entries were false. The Kerala High Court in these circumstances held that the placing of bogus debit as genuine constituted furnishing of inaccurate particulars of income and attracted the Explanation to section 271(1)(c) of the Act. Both these cases were decided on their own peculiar facts. The assessees therein had been given opportunity to rebut the evidence on record which was against them and to substantiate their explanations. But they had failed. They could not establish even probabilities in their favour. The presumption of concealment which arises under the Explanation to section 271(1) was, therefore, found to have not been displaced. In Krishan Lal Shiv Chand Rai v. Commissioner of Income-tax the High Court of Punjab and Haryana referred to the established principle of law that a party was entitled to show and prove that an admission made by him previously was in fact not correct and true. The Inspecting Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted to raise the contention for the first time before us on the basis of the Explanation. Even if he is allowed to raise this contention, we find ourselves unable to accept the same. The opportunity, to which the assessee is entitled, to rebut the presumption of concealment of income raised under the Explanation by showing that his failure to return correct income was not due to any fraud or gross or wilful neglect, was denied to him in the instant case. The assessee here had not admitted that the amount in question was its concealed income as had been in the case of Durga Timber Works. It explained, on the other hand, that it was unable to render proper explanation of the credits after the lapse of five years. It had also been contended before the Tribunal in appeal against the penalty order that the assessee surrendered the credits because the assessment was getting time-barred and the assessee had co-operated with the department in the expectation that there will be no penalty in respect of the said amounts. The assessee also furnished relevant copies of the cash book and was able to show that it had made these payments to the parties concerned during the earlier years. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
