TaxTMI 
TaxTMI 
1994 (3) TMI 148
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....iated. It was found that the assessee had received a loan of Rs. 1 lakh from M/s Globe Associates (P.) Ltd.,New Delhi, a company under liquidation. In the books of account of the above company, the loan amount was debited on13-12-1960and credited on29-12-1960. The corresponding entry of loan received was found in the assessee's books of account on14-12-1960, but there was no entry of repayment to M/s Globe Associates (P.) Ltd. on or about29-12-1960. The amount was carried forward from year to year and transferred to Suspense Account on13-12-1965. It was admitted that entry relating to repayment on29-12-1960was correct. The assessee was asked to explain the source of repayment of loan to M/s. Globe Associates (P.) Ltd. It was claimed that Dr. A.V. Baliga had received donations from different persons and those donations were utilised for repayment of the loan. The amount was remitted through one Shri S.L. Kapoor. The details of the donations received were not furnished, as Dr. Baliga was dead by the time the proceedings were taken. However, Shri S. L. Kapoor denied the transaction in the statement recorded by the Assessing Officer. The assessee further could not give the Branch of th....
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....ntification of penalty under section 271(1)(c) of the Income-tax Act ? (b) Whether, on the facts, penalty is exigible as per the relevant provisions applicable in this case ?" 9. As far as the first question is concerned, the learned counsel of the assessee submitted that the matter has to be decided in accordance with the decision of the Hon'ble Supreme Court in the case of CIT v. Onkar Saran & Sorts [1992] 195 ITR 1. The learned Departmental Representative, on the other hand, argued that the issue is to be determined in accordance with the decision of the Hon'ble Supreme Court in the case of Varkey Chacko v. CIT [1993] 203 ITR 885. 10. We have considered the decisions cited at the bar. In our considered view, the matter is not res integra and is fully covered by the decision of the Supreme Court in the case of Onkar Saran & Sons. The decision cited on behalf of the Revenue which relates to the initiation of penalty proceedings under section 274 of the Income-tax Act also supports the view canvassed on behalf of the assessee. This is clear from the following observations available at pages 890/891 of the report:--- "A penalty for concealment of particulars of income or....
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....nbsp; Before Amendment After Amendment (1) (2) (3) --------------------------------------------------------------------------------------------------------------------------....
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....; particulars of such in- such income, such income, come, he or it may direct that he may direct that such he may direct that such such person shall pay by person shall pay by way person shall pay by way way of penalty in the case of penalty, of penalty... referred to in clause (a), in additio....
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....; such person had been nished. come-tax and super-tax, accepted as the correct Explanation: Where the if any, which would have income. total income returned by been avoided if the in- (2)...... any persons is less than come as returned by such &n....
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....nbsp; by the expenditure incurred bona fide by him for the purposes of making or earning any income &nb....
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....bsp; return the correct income did not arise from any fraud or any gross or willfu....
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....p; sub-section." 13. The provision of section 28(1)(c) of the Income-tax Act, 1922 were considered by Their Lordships of the Supreme Court in the celebrated case of CIT v. Anwar Ali [1970] 76 ITR 696. Their Lordships laid down the following proposition:--- "The next question is that when proceedings under section 28 are penal in character what would be the nature of the burden upon the department for establishing that the assessee is liable to payment of penalty. As has been rightly observed by Chagla, C.J. in CIT v. Rokuldas Harivallabhadas, the gist of the offence under section 28(1)(c) is that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income and, therefore, the department must establish that the receipt of the amount in dispute constitutes income of the assesse....