TaxTMI 
TaxTMI 
1975 (9) TMI 62
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....enalty proceedings, the Income-tax Officer called upon the assessee to state his objections against levy of penalty for both these years. Since the assessee did not respond to the show cause notices and reminders served on him, the Income-tax Officer presumed that the assessee accepted the defaults and was therefore liable for penalty under s. 271(1)(c) for these two years. The Income-tax Officer held that it was apparent from the revised returns filed by the assessee on 23rd December, 1970 that the assessee had concealed the particulars of his professional income in the original return and also in the revised return for these two years. He further held that since the assessee did not avail of the opportunity afforded by him to show cause a....
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....was under the apprehension that in the absence of supporting evidence, the Income-tax Officer might not allow all the expense claimed by him in his original returns and that, therefore, he himself restricted his claim of expenses for both the years for such of those items that would be found acceptable to the Income-tax Officer. On these facts, the assessee pleaded that there was no basis for the Income-tax Officer's finding that the revised returns implied any concealment of income in the original return to justify the imposition of the penalties under s. 271(1)(c) of the Act. 5. After examining the contentions urged before him, the Appellate Assistant Commissioner was satisfied that there could be no penalty for the estimated addition of....
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.... though the charge of concealment might not apply to the entire difference between the income assessed and the income disclosed in the original returns, there could be no dispute about the fact that the receipts understated to the extent of Rs. 4,000 in each year represented concealed income. He, therefore, held that the penalty imposed by the Income-tax Officer would have to be reduced to the amount leviable with reference to this fact. For the assessment year 1968-69, the Appellate Assistant Commissioner accepted the plea of the assessee that as his original return was filed on 16th January, 1968 prior to the amendment of s. 271(1)(c)(iii) before its amendment with effect from 1st April, 1968, penalty would be leviable with reference to t....
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....e of any mens rea on his part which alone would justify the imposition of penalties. He further pointed out that the assessee's action in filing the revised returns on 23rd December, 1970 should not be put against him to draw an adverse inference of concealment of income against him with reference to the receipts shown in the original returns for these two years. He further pleaded that the receipts shown by the assessee were actually more than the particulars gathered by the department regarding the payment of fees to the assessee from the various government departments during the two years. He, therefore, submitted that no penalty would be exigible in respect of both these years and that the penalties sustained by the Appellate Assistant ....
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.... the learned Departmental Representative. 10. In respect of the assessment year 1967-68, the assessee admitted total receipts of Rs. 20,000 in his original return filed on 16th January, 1968, whereas the total sum of receipts from the various departments amounted to Rs. 22,017. Even if we leave out of account the revised return for the time being, it would be clear that there was difference of nearly Rs. 2,000 between the figures gathered by the department and the receipts disclosed by the assessee in his original return. To this extent it has to be held that the assessee has furnished inaccurate particulars of his income since no explanation is offered by the assessee for this shortfall even in the original return. We, therefore, agree wi....
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....ent. We also do not find any material which would support the inference of culpable neglect relied on by the Appellate Assistant Commissioner to sustain the penalty. On the contrary, when we look at the conduct of the assessee from the filing of the original return on 16th September, 1968 to 23 December, 1970 when he filed his revised return for this year as a whole, we are unable to find any thing which would suggest any fraud or gross or wilful neglect on the part of the assessee, within the meaning of the explanation to s. 271 (1)(c) of the Act in returning his correct income for this year. On the other hand, his conduct shows that he was anxious to disclose his correct income by showing even larger receipts than the particulars gathered....