Decided on March 12,1976

N. G. Paul And Co., Gairkata, Distt. Jalpaiguri Appellant
Income -Tax Officer, "A" Ward, Jalpaiguri Respondents

Referred Judgements :-



SABYASACHI MUKHARJI,J. - (1.)IN this application under Art. 226 of the Constitution the petitioner is challenging an order dated 14th of September, 1973 passed under section 262 of the Income Tax Act, 1961 by the Additional Commissioner of Income Tax, West, Bengal I. It appears that for the relevant assessment year namely, assessment year 1965 -66 the petitioner had returned income for Rs. 6,581/ -. The Income Tax Officer assessed the income at Rs. 2,15,719/ -. In appeal the Appellate Assistant Commissioner reduced the Income by Rs. 1,24,963/ -. In second appeal the Income Tax Appellate Tribunal reduced the income by Rs. 41,610/ - and as a result the reduced Income was 49,146/ -. The difference of Rs. 42,000/ - between the returned income and the assessed income was based on the following : 1) Rs. 20,102/ - trading account.
(2.)Rs. 437/ - being alleged expenses incurred by the assessee, and -
being cash credit brought into the accounts introduced in the accounts of the assessee Rs. 22,026/ -. 2. Proceedings were taken against the assessee under section 271(1)(c) for concealment of income. The Inspecting Commissioner imposed a penalty of Rs. 6,230/ -. Against the order of penalty the petitioner did not prefer any appeal but made an application before the Commissioner of Income Tax for revision. The Commissioner by his order dated 14th of September, 1973 dismissed this revision application. The said order is under challenge in this application under Article 226 of the Constitution. The Commissioner was of the view that was a cash credit of Rs. 3,026/ - which was introduced to inflate the cash balance and which was admitted, according to the Commissioner, to be the income from business before the Tribunal. According to the Commissioner, the Tribunal also found a sum of Rs. 200/ - had been inflated in the account of Raj Brothers, Rs. 3,000/ - in the cash book which was not ledgerised and the party had denied any such transaction and the assessee claimed it to be business profit. The Commissioner has also referred the Tribunals order that the cash credit of Rs. 10,000/ - which, according to the creditor, was merely a book entry at the request of the assessee. The Tribunal also found that there was no evidence relating to cash credit of Rs. 5,800/. - 3. By the explanation to sec. 271(1)(c) where the total income returned by any person is less than 80 per cent of the total income as assessed under section 143 or under section 144 or under section 147 (reduced by the expenditure incurred bonafide by him for the purposes of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purpose of clause (c) of this sub -section (1).

(3.)THE explanation, therefore, creats a rebutable presumption and the assessee, unless he rebutes the presumption of evidence, is deemed to have concealed the income, Evidence required to be adduced by the assessee to show that the concealment of income or furnishing of the inaccurate particulars were not due to fraud or to any wilful neglect. The explanation therefore, places the burden of proving that the failure to return the correct income did not arise from any fraud or gross or wilful neglect upon the assessee. The explanation creates a presumption only where the total income returned was less than 80% of the assessed income. The presumption can, however, he displaced by the assessee by proving that the failure to return the correct income did not arise from any fraud or gross or wilful negligence. The proof that would be necessary to rebut that presumption would be the preponderance of probability in the facts and circumstances of the case. - -

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