Ajit K.Sengupta, J. - (1.) At the instance of the Commissioner of Income-tax, West Bengal, the following question of law has been referred to this court under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1961-62 : "Whether, on the facts and in the circumstances of the case and in view of the disclosure petition filed by the assesses under Section 271 (4A) of the Income-tax Act, 1961, there was any burden on the Department to further prove that the amounts added by the Income-tax Officer represented revenue receipts and the assessee concealed the same, for the purpose of imposing penalty under Section 271(1)(c) of the Income-tax Act, 1961 ?"
(2.) The facts briefly stated are that in the course of the assessment, the Income-tax Officer noticed credits in the names of several persons in the books of the assessee. It was represented that these amounts represented loans taken on hundis from those persons. Confirmation letters from them had been filed with a view to verify the genuineness of the transactions. Notices were issued to these parties by the Income-tax Officer. In regard to some of them, the notices could not be served and some of them did not comply with the notices. Three of the parties, however, appeared before the Income-tax Officer but did not produce their accounts. In these circumstances, the Income-tax Officer refused to accept the contention put forth by the assessee and treated a sum of Rs. 1,67,500 which was the peak of the credits as the assessee's income from undisclosed sources. In view of this, he initiated proceedings under Section 271(l)(c) and on the ground that the minimum penalty imposable would exceed Rs. 1,000, referred the matter to the Inspecting Assistant Commissioner.
(3.) It transpires that subsequent to the assessment, the assessee filed a petition under Section 271(4A) of the Act before the Commissioner purporting to be a voluntary disclosure. However, this was not accepted by the Commissioner. It was, inter alia, contended before the Inspecting Assistant Commissioner that, in view of the petition that had been filed, no penalty should be imposed. The Inspecting Assistant Commissioner did not accept this contention and he came to the conclusion that it had been admitted that the alleged loans were bogus and, therefore, the assessee had concealed its income and deliberately furnished inaccurate particulars. He also noticed that, as against the assessment, no appeal had been filed. He imposed a penalty of Rs. 40,000.;