TaxTMI 
TaxTMI 
1996 (2) TMI 163
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....The statement of income annexed with the said return, inter alia, disclosed that the assessee has shown income from business in the name of Gaurang Trading Co. amounting to Rs. 13,542. Since the said trust derived income from business, the entire income of the trust was liable to be taxed at maximum marginal rate in view of the amendment made in sec. 161(1A) with effect from 1-4-1985. The assessment was completed u/s 143(3) on total income of Rs. 32,510 on 30-3-1988 and tax payable was worked out at Rs. 31,298. The Assessing Officer initiated penalty proceedings u/s 271(1)(c), for failure on the part of the assessee to pay tax at maximum marginal rate on the whole of the income of the said trust as required by section 161(1A) effective from....
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.... also not furnished any inaccurate particulars of its income. The mere fact that the tax has not been paid at maximum marginal rate as per the amended provision introduced with effect from A.Y. 1985-86 would not bring the assessee's case within the mischief of section 271(1)(c), which can be invoked only in cases where the assessee has concealed its income or had furnished inaccurate particulars of income. He also supported the order of the Dy. CIT(A) on the strength of various reasons recorded in the said order. 6. I have carefully considered the submissions made by the learned representatives of the parties and have also gone through the orders of the learned departmental authorities. Sub-section (1A) of sec. 161 was inserted by the Fina....
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....nt extracts from the head note appearing at pg. 330 :---- " (ii) There is no presumption that every person knows the law. It is often said that everyone is presumed to know the law, but that is not a correct statement: there is no such maxim known to the law. " Once the preponderance of probabilities stands established in favour of the assessee's contention, the penalty levied will have to be cancelled. 7. The other submission made by the learned counsel for the assessee is also equally convincing. The penalty has been levied not because the assessee has concealed the particulars of income. It also cannot be validly said that the assessee has furnished any inaccurate particulars of its income. The only default on the part of the assessee....