- (1.) IN spite of service, nobody has appeared on behalf of the assessee. Accordingly, we proceed to decide the reference ex parte.
(2.) IN the assessment proceedings relating to the assessment year 1969-70, the Income-tax Officer found cash credits in the account books of the assessee from six persons to the tune of Rs. 17,200. The Income-tax Officer doubted the genuineness of the deposits and gave opportunity to the assessee to produce the creditors. None of the creditors appeared and Rs. 17,200 were added as income of the assessee from undisclosed sources. In the quantum proceedings, the addition became final.
(3.) PROCEEDINGS for levy of penalty were started under Section 271 (1) (c) of the Income-tax Act, 1961 (hereinafter called "the Act" ). In those proceedings, the stand of the assessee was that the deposits were genuine but no evidence was produced in support of that in spite of opportunity having been granted. The Income-tax Officer imposed penalty of Rs. 17,200 which was the minimum penalty leviable. On appeal, the Appellate Assistant Commissioner of Income-tax upheld the penalty after recording a finding that the assessee did not produce any evidence whatsoever in support of the genuineness of the disputed credits. On further appeal, the Income-tax Appellate Tribunal deleted the penalty on the reasoning that the onus to prove that the disputed amounts represented the taxable income of the assessee and that the assessee had concealed the same, was on the Department which the Department failed to discharge. It further held that merely rejecting the explanation of the assessee does not amount to proof of concealment of income by the assessee. At the instance of the Revenue, the Tribunal has referred the following question for opinion : "whether, on the facts and in the circumstances of the case, the Tribunal is right in law in cancelling the penalty imposed under Section 271 (1) (c)?";