Satish Chandra, C.J. - (1.) THE question for our consideration is whether the Tribunal was right in holding that the penalty under Section 271(1)(c) of the I.T. Act, 1961, was not exigible.
(2.) FOR the assessment year 1964-65, the assessee filed a return on 3rd January, 1969, declaring a total income of Rs. 3,700. During the course of assessment proceedings the ITO found that deposits totalling Rs. 9,400 existed in the assessee's account books. These were in the accounts of Gyan Prakash, Sushil Kumar and Ahmad Khan. The officer required the assessee to prove the genuineness of these deposits and also to furnish the addresses of these persons. The assessee did not respond. He did not produce any evidence or furnish the required addresses. The ITO concluded that these deposits were not genuine and he added them as income from undisclosed sources. The assessment was passed on a total income of Rs. 15,000 under Section 144 of the I.T. Act, 1961. The assessee filed appeals, but failed before the AAC as well as the Tribunal. The additions were sustained. In due course penalty proceedings were initiated. The assessee failed to respond or reply to the notice issued by the IAC. He imposed a penalty of Rs. 12,000.
(3.) THE assessee went up in appeal. THE Tribunal quashed the penalty order. THE Tribunal observed : "After perusing the order of the IAC, as also the assessment order and taking into consideration the arguments of both the sides, I am of the view that it is a case of no explanation in respect of the cash credits. When the assessee does not explain its cash credits, the assessment may be justified but the penalty is not on the basis of no explanation by the assessee in respect of cash credits. THE revenue has to prove the charge of concealment or even of furnishing of inaccurate particulars. If it cannot prove the charge, the penalty does not become exigible. Only because the assessee did not furnish any explanaton in respect of the cash credits that does not by itself establish the charge of concealment in view of the case of Anwar Ali [1970] 76 ITR 696 (SC). I, therefore, hold that the penalty is not exigible which is deleted," The Tribunal was of the view that the charge of concealment has to be proved by the revenue. In support, reliance was placed upon the Supreme Court decision in Anwar Ali's case [1970] 76 ITR 696.;