Decided on March 21,1983



Suhas Chandra Sen, J. - (1.) The Tribunal has referred the following questions of law under Section 256(2) of the I.T. Act, 1961: "1. Whether, on the facts and in the circumstances of the case, the Tribunal had any evidence to hold that the penalty, under Section 271(1)(c) of the I.T. Act, 1961, was imposed by the IAC on an altogether different charge than that on which the ITO had initiated the penalty proceedings and whether such finding was otherwise unreasonable or perverse ?
(2.) Without prejudice to question No. 1, whether, on the facts and in the circumstances of the case and in view of the fact that the assessee had disclosed an incorrect figure of closing stock while filing the original return of income and on a correct interpretation of the Explanation to Section 271(1)(c) of the I.T. Act, 1961, there was any onus on the Department to prove that the assessee had concealed its income or had furnished inaccurate particulars of such income ?
(3.) Whether, on the facts and in the circumstances of the case, and in view of the Tribunal's finding while disposing of the assessee's appeal against the assessment order that the ITO had detected certain unaccounted for purchases and sales, the Tribunal misdirected itself in law in holding that the IAC was not justified in imposing a penalty under Section 271(1)(c) of the I.T. Act, 1961 ?" The relevant facts as set out in the statement of the case are as under : During the course of assessment proceedings, the ITO found that purchases and sales of rice were duly vouched according to the assessee's books. However, in order to verify some of the transactions, he issued notice under Section 131 of the 1961 Act on M/s. Satyanarayan Rice Mills, with whom the assessee had dealings. On examination of the books of M/s. Satyanarayan Rice Mills, the ITO found that the assessee had purchased rice worth Rs. 6,207.50 on January 1, 1963, Rs. 4,420.80 on January 6, 1963, Rs. 4,144.30 on January 15, 1963, and Rs. 4,929.18 on February 25, 1963, on credit but the same were not disclosed in the assessee's books. The assessee's representative was also present when the books of M/s. Satyanarayan Rice Mills were examined by the ITO. Therefore, the ITO concluded that the assessee had suppressed certain purchases and sales of rice. The ITO also held that the G.P. at 2% shown by the assessee was low. Accordingly, in his assessment order dated October 30, 1965, the ITO estimated the sales as at Rs. 19,50,000 in place of Rs. 19,11,004 disclosed by the assessee. Again, the ITO adopted a gross profit rate at 3.3% as against 2% disclosed by the assessee and made an addition of Rs. 66,250 to the trading results of the assessee. Simultaneously, he initiated penalty proceedings under Section 271(1)(c) of the Act, 1961, and referred the matter to the IAC as the minimum penalty imposable exceeded Rs. 1,000.;

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