Decided on May 03,1980



K.K.DUBE, J. - (1.)THE following question of law has been referred for four opinion at the instance of the assessee:
"Whether, on the facts and in the circumstances of the case, the Tribunal was in law justified in imposing penalty on the assessee under S. 271(1)(c) of the IT Act, 1961 -

(2.)THE assessee derived income from money -lending, house property and brokerage on sale and purchase of land. For the asst. year 1960 - 61, the assessee filed a return on July 23, 1964, showing income from money -lending at Rs. 215 and from house property at Rs. 260. The assessee did not maintain books of account in the form of cash book and ledger. The ITO on the basis of the previous record estimated the capital invested in money -lending at Rs. 78,000 and on that basis came to a conclusion that the income from interest would be Rs. 9,600. During the same year, the assessee had constructed a house, the cost of which was shown by the asses - see to be Rs. 7,000. This was not accepted and the ITO estimated the cost at Rs. 10,000. The sum of Rs. 3,000 was treated as income from undisclosed sources. For the same year, the assessee had shown sales of land of the value of Rs. 29,305. Out of this amount, the assessee had satisfactorily explained and accounted for Rs. 12,015 but for the rest his explanation was not accepted. The ITO found that the assessee could not explain how the rest of the "amount was arrived at" nor offered any explanation as to the "source of the amount". The ITO initiated penalty proceedings. As the minimum penalty imposable exceeded Rs. 1,000, he referred the matter to the IAC, who, after taking into consideration the explanation given by the assessee, imposed a penalty of Rs.5,000.
(3.)THE assessee filed an appeal before the Tribunal. The Tribunal was of the opinion that in respect of the income from interest and the estimate of cost of house and the sale of land, the ITO has estimated the income as the assessee's explanation was not satisfactory. The assessee has concealed his income and the penalty proceedings were rightly attracted. The question that arises for our consideration is wheather the penalty proceedings were justified.
The assesee had not maintained any cash book or ledger and it was open to the ITO to make a fair estimate of the income of the assessee. As far as the amount of Rs. 17,290, which was shown to be from sale of land was concerned, his explanation was not accepted. The ITO was of the view that the assessee had failed to explain that the income arose from agriculture. As against this, the assessee was of the view that his income was not taxable during that year and, therefore, he had not filed any return. The penalty proceedings under S. 271(1)(c) are akin to criminal proceedings and the onus lay on the Department to show that the amount of income concealed by the assessee was of revenue nature and was assessable as income and that the assessee had concealed it or deliberately furnished false particulars in regard thereto. Merely because the assessee's explanation was rejected by the Department, it would not necessarily give arise to an inference that the asssessee has surreptitiously suppressed income. There should be material on record to prove the nature of the income and that it was taxable. The findings given in the assessment proceedings for determining or computing the tax are not conclusive as far as the penalty proceedings are concerned. The entiretly of circumstances must be taken into consideration and they must reasonably point to the conclusion that the disputed amont represented income, and that the assessee had consciously concealed the particulars of income or had delilberately furnished inaccurate particulars. We will have to see whether there is any evidence to suggest that the assessee had deliberately concealed the income and consciously chosen to give inaccurate particulars of the income.

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