TMI Blog1974 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Assistant Commissioner under the Explanation to section 271(1)(c) ?" The circumstances in which this application comes to be filed are that the assessee, who is carrying on business in precious stones, filed a return showing its income as Rs. 32,940 for the assessment year 1967-68. The Income-tax Officer, " A " Ward, Jaipur, assessed the total income of the assessee for the year in question at Rs. 74,613 by including an estimated amount by way of gross profit and by disallowance of some of the expenses claimed by the assessee. On appeal by the assessee, the Appellate Assistant Commissioner reduced the total income of the assessee to Rs. 66,401. As the returned income was less than 80% of the assessed income penalty proceedings unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rical acceptance of concealment of income on its part. The case of the assessee is clearly distinguishable on facts from the case of Durga Timber Works, relied on by the learned departmental representative. In that case, there was a categorical acceptance by the assessee of concealment of income and an agreement that such income may be included in its total income as its concealed income. Having regard to all the circumstances of the case, we are unable to infer any fraud or gross or wilful neglect on the part of the assessee which had contributed to the difference between the income returned and the income assessed. Accordingly, we cancel this penalty and allow the appeal." The Additional Commissioner of Income-tax, Rajasthan, thereupon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and failed to consider that the very action on the part of the assessee to file a return in respect of less than 80% of its assessed income is sufficient to assume that there was a deliberate concealment or fraud or wilful neglect on the part of the assessee in returning its income and as the assessee was unable to place any material on record to show that its failure to return the correct income did not arise on account of fraud or gross or wilful neglect, the imposition of penalty upon the assessee was justified and should not have been cancelled by the Tribunal. The learned counsel for the assessee supported the order of the Tribunal and argued that no question of law arose out of the order of the Tribunal and as such the reference appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the plaintiff which the defendant was not allowed to traverse (see Maine's Ancient Law, Chapter II). According to Wharton's Law Lexicon (fourteenth edition) "fictions" are "those things that have no real essence in their own body but are so accepted in law for a special purpose". Webster's Third New International Dictionary describes a fiction as "an allegation or supposition in law of a state of facts assumed to exist which the practice of the courts allows to be made in pleading and refuses to allow the adverse party to disprove". According to Words and Phrases, permanent edition, volume 16A (published by West Publishing Company, St. Paul, U.S.A.) a "fiction of law" is "an assumption or supposition of law that something whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " According to Webster's Third New International Dictionary, presumption is "an inference as to the existence of the fact not certainly known from the known or proved existence of some other fact, sometimes operating as evidence, sometimes as a rule of procedure as to who must proceed with evidence on the main issue, or as to who has the burden of proof and sometimes having no effect as evidence, once evidence on the issue is in". In this view of the matter, the Explanation only gives rise to a rebuttable presumption and has the effect of placing the burden of proof on the assessee which formerly, before the Explanation was introduced, was on the department. Weare, therefore, unable to accept the contention of the learned counsel for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they related to the assessment years which were governed by the Explanation. In fact the Tribunal has referred to the Explanation in so many words. The Tribunal, however, felt satisfied that the presumption raised by the Explanation stood rebutted because the additions made to the incomes returned were merely estimated or notional and the difference was also not substantial and the Tribunal was not prepared to conclude fraud, wilful or gross neglect. The evidence which satisfied the Tribunal were the facts and circumstances of the cases which it had decided itself. The evidence may be direct or circumstantial or both. Mere statement of the assessee maybe enough in some cases. What quantum of evidence would rebut a legal presumption in a gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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