TMI Blog2004 (9) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... tated to have been given out of the agricultural income. However, as per the statement of Shri Boota Singh, h/o Smt. Gurdev Kaur, it came to light that Smt. Gurdev Kaur was not having any agricultural land in her name. Copy of the bank account No. 1606 with Punjab Sind Bank, Dabwali was also furnished before the revenue authorities. A perusal of the bank account revealed that the said account was in the joint name of Smt. Gurdev Kaur and Smt. Baljit Kaur (her married daughter). It was also noticed that a sum of Rs. 25,000 was deposited in the said account on 1-5-1989. The Source of Rs. 23,000 was explained with reference to the withdrawal of Rs. 23,000 on 2-5-1989 from the said bank account. The husband of the creditor Shri Boota Singh had stated in his statement that the amount of Rs. 25,000 was given by him to his wife out of past savings out of agricultural income. The Assessing Officer did not accept the explanation of the assessee as satisfactory and accordingly made an addition of Rs. 23,000. It was observed that the explanation in regard to deposit of Rs. 25,000 out of past cash savings with the husband was not acceptable as Shri Buta Singh was also having a bank account i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablish the identity of the creditors, their creditworthiness and the genuineness of the credits. It was submitted that affidavits of the creditors had been furnished before the Assessing Officer. The payment had been received by account-payee cheques and repayment had also been made by account-payee cheques (this claim is disputed). Shri Amarjit Singh had appeared before the Assessing Officer and in his statement he has not only admitted the advancement of loan of Rs. 35,000 but has also explained the source in respect thereof. The evidence in regard to ownership of agricultural land was also produced before the Assessing Officer. In the case of Smt. Gurdev Kaur, an affidavit was furnished before the Assessing Officer, the payment was received by means of account-payee cheques and repayments had also been made by account-payee cheques. The statement of the husband of the creditor had been recorded who had specifically confirmed having advanced the loan to the assessee and had also explained the source of the credit in the bank accounts jointly held by him with his wife, the creditor. 7. According to the ld. Counsel for the assessee, the assessee has discharged the primary onus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv) Om Parkash Gupta v. ITO [2002] 81 ITD 55 (Chd.). The ld. D.R. further contended that the explanation of the assessee was not considered to be satisfactory by the revenue authorities as well as by the Tribunal and no further evidence has been produced by the assessee as a result of which penalty under section 271(1)(c) is justified. 9. We have given our careful consideration to the rival contentions. It is well-settled principles of law that whether penalty for concealment of income for furnishing of inaccurate particulars of income is attracted in a particular case or not is dependent on the relevant law as applicable for the relevant assessment year in the absence of which penalty under section 271(1)(c) is not attracted. 9.1 In the case of Anwar Ali, Their Lordships of the Supreme Court had laid down that the onus was on the revenue to establish that there was conscious concealment of particulars of income or a deliberate failure to furnish accurate particulars. 9.2 In the case of Sir Shadilal Sugar General Mills Ltd., Their Lordships of the Supreme Court laid down that the mere fact that the assessee had surrendered the income was not sufficient for imposition of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law arises". Their Lordships of the Supreme Court at page 21 of the report approved of the findings of the Punjab Haryana High Court in the case of Vishwakarma Industries. The relevant portion of the judgment of the Supreme Court is quoted hereunder: - "Our attention was drawn to several decisions to which, out of deference to Shri Manchanda who argued before us on behalf of the Revenue, we shall refer, Vishwakarma Industries v. CIT [1982] 135 ITR 652 (P H) is a decision of the Full Bench of the Punjab Haryana High Court where Sandhawalia C.J., speaking for the Full Bench, observed that the object and intent of the Legislature in omitting the word 'deliberately' from clause (c) of section 271(1) of the Income-tax Act, 1961, was to bring about a change in the existing law regarding the levy of penalty so as to shift the burden of proof from the Department on to the assessee in the class of cases where the returned income of the assessee was less than 80% of the assessed income. The learned Chief Justice noted that the significant thing about the change made in clause (c) of section 271(1) was the designed omission of the word 'deliberately' therefrom, whereby the requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that "In order to justify the levy of penalty, two factors must co-exist, (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee's income. It is not enough for the purpose of penalty that the amount has been assessed as income, and (ii) the circumstances must show that there was animus, i.e., conscious concealment or act of furnishing of inaccurate particulars on the part of the assessee. Explanation 1 to section 271(1)(c) has no bearing on factor No. 1 but has a bearing only on factor No. 2. The explanation does not make the assessment order conclusive evidence that the amount assessed was in fact the income of the assessee. No penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved, i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false, the Explanation cannot help the Department because there will be no material to show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sadilal Ram Bharose [1987] 165 ITR 14, the Apex Court had approved the interpretation placed upon the Explanation by a Full Bench of the Punjab Haryana High Court in Vishwakarma Industries v. CIT [1982] 135 ITR 652. The same issue was also dealt with by the Apex Court in the case of CIT v. K.R. Sadayappan [1990] 185 ITR 49." 10. On the analysis of the aforementioned decisions, it is observed that after the insertion of Explanation to section 271(1)(c), revenue is not required to establish by cogent evidence that assessee has concealed the income or furnished inaccurate particulars of income. Explanation to section 271(1)(c) creates a presumption against the assessee. The said presumption, however, is rebuttable presumption. The findings in the assessment order constitute good evidence and in the course of penalty proceedings, the assessee has to satisfactorily explain that the explanation furnished is bona fide and that all the facts relating thereto have been disclosed by him. In such cases, where the assessee has given explanation, it will be for the fact-finding body to judge as to whether the assessee has discharged the onus in regard to deeming provisions of section 271(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanation of the assessee is plausible, then penalty under section 271(1)(c) is not justified. However, if the explanation of the assessee is not plausible, then in the absence of any other evidence furnished by the assessee, penalty under section 27l(1)(c) may be attracted with reference to the explanation to the said section. So, however, in this case, we are of the view that the explanation of the assessee is plausible and the very fact that part of the credit was accepted to be genuine supports the view that the remaining part of the credit in the case of Smt. Gurdev Kaur may also have genuinely come from the creditor in respect of which she was not able to satisfy the revenue authorities as well as the Tribunal to establish the immediate source. In the case of Shri Amarjit Singh also, the identity is established, his creditworthiness is also established, the credit has not been accepted as he was not able to establish the immediate source of Rs. 35,000 in the bank account before issue of cheque in the name of the assessee. It is established that Shri Amarjit Singh was man of means insofar as he was having more than 30 acres of land from which income of more than Rs. 60,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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