TMI Blog1987 (11) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... the firm's case comprised of the following items : (c) On further verification of rough cash book it was noticed that the debit side exceeded credit side of the book. On 4th Nov., 1975 such difference which was at Rs. 3,080 gone upto Rs. 15,885 on 29th Nov., 1975. As stated earlier, even those transactions noted in the cash book as per the principles of opportunity, debit will never exceed credit. Here in this case it exceeded, which proved beyond doubt that there is an unexplained investment of the assessee. Accordingly, this amount of Rs. 15,885 was added to the total income of the assessee firm. 3. All the above additions made were confirmed by the CIT(A), Rajkot vide his order dt. 4th Nov., 1982. 4. As stated earlier, since the firm has not filed any reply to the show cause notice issued and the fact that the additions have been confirmed by the CIT(A), I am satisfied that the firm has committed default by not furnishing accurate particulars of its income. I therefore, levy a minimum penalty of Rs. 13,794 as against the maximum leviable of Rs. 27,568." 3. On appeal, the levy was confirmed by the Commissioner(A) in para 2 of his order. He has given his findings, brie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on CIT vs. Vinaychand Harilal (1979) 8 CTR (Guj) 247 : (1979) 120 ITR 752 (Guj) and CIT vs. Lakhdhir Lalji (1972) 85 ITR 77 (Guj), it was stated that the ITO had initiated the penalty proceedings for furnishing inaccurate particulars of income and accordingly, the penalty was levied. The Commissioner (A) confirmed the penalty on the basis that there was concealment of income and this was without any authority with the Commissioner (A). He then took us through the relevant aspects in respect of the proceedings in quantum assessment and pointed out that earlier in the draft assessment order nine additions were proposed aggregating to Rs. 16 lakhs plus. However, when a reference was made under s. 144B of the Act to the IAC, various additions were deleted and ultimately aggregate addition of Rs. 41,000 plus was directed to be retained by the IAC and that too in respect of only five items. The addition was further reduced to Rs. 23,000 plus by the Commissioner (A) again only on three items. On further appeal the Tribunal had confirmed the addition to the extent of Rs. 15,885 only for one item. This being the position it was sought to be argued that there was no case for levy of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Allahabad High Court relied upon by the Commissioner (A) fully supported the stand of the Revenue. With regard to the aspect regarding huge additions proposed in the draft order, as ultimately addition was confirmed for very small amount it was submitted that this fact itself justified the levy of penalty because various additions were processed in the context of evidence and circumstances by various appellate authorities. 6. The learned representative of the assessee, in reply, again reiterated the proposition laid down by the Supreme Court, in respect of the situation where the case fell in substantive provisions of levy of penalty, the burden was on the Revenue to conclusively prove mensrea. The assessee may even choose to remain silent yet the burden will not shift from revenue to the assessee. The decisions of the Supreme Court as well as the Allahabad High Court were pertaining to the cases where the penalty was brought to be levied on the basis of Explanation to s. 271(1)(c) having been admittedly attracted and therefore, altogether different situation was considered. The decision of the Madras High Court had no occasion to consider the decision of the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of imposing the penalty the addition made on account of unexplained investment for an unsatisfactory explanation will not suffice. The finding in respect of deemed income on account of unexplained investment shall have to be converted into an actual income of the year and then only the second stage of consideration whether there was conscious concealment or default can be considered. This has not been done. No doubt, it is uncontroverted fact as stated by the Departmental Representative that in spite of the opportunity at the time of penalty proceedings the assessee did not take the opportunity of leading the appropriate evidence. But this itself would not relieve the Revenue from an obligation of giving the appropriate finding regarding the income having been concealed or inaccurate particulars having been furnished. Even if no further evidence is gathered at the time of penalty proceedings yet the ITO has to reconsider and reappraise the materials on record and highlight particular evidence on the basis of which it can be reasonably said that though the addition was made under deeming provisions yet in fact the amount so added was income and that too of the assessment year under ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
