TaxTMI 
TaxTMI 
1984 (5) TMI 99
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....en the value of the house fixed by the Valuation Officer as claimed against the actual cost of the construction of the house incurred by the assessee. He submitted that this position on facts is so clear that no one could reasonably come to the conclusion that penalty is leviable upon the assessee for concealment of income to the extent of Rs. 8,000. The ld. counsel for the assessee submitted that even if it may be argued that penalty is imposable because the difference has been considered as income of the assessee and this addition has been upheld in appeal it can be said to be at worst a case where explanation of the assessee has not been accepted and when such an explanation is not accepted, there is no case for imposition of penalty. Th....
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.... of income was filed on 19th July, 1976 declaring income of Rs. 9,200. It appears that the assessee had been assessed earlier in the status of an individual. However, for the year under appeal is the revised return the status of HUF was claimed and it was accepted by the ITO because for the purpose of wealth-tax the status of HUF had been adopted. The ITO found that the assessee had entrusted a house at Pandurna for which the cost was shown at Rs. 76,000. In support of the cost of construction, a certificate from an approved valuer Shri B.N. Chatterjee was filed. The assessee also pointed out to the ITO that the said house had been constructed under self-supervision resulting in savings. The ITO however, as claimed referred the matter to th....
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.... Keeping in view all these circumstances, we are of the opinion that there is no force in the assessee's appeal, which is hereby dismissed." 5. Now, when the penalty proceedings were going on, the assessee filed an explanation dt. 16th March, 1982 appearing at pp. 9 to 14 of the assessee's paper book. In this explanation, the assessee pointed out that though the ITO has mentioned in the assessment order that the value of the house constructed by the assessee was got determined from the Valuation Cell, yet, in fact, the ITO had not referred the case to the Valuation Officer for estimating the cost of construction of this house. In this letter it was further submitted that the explanation given by the assessee for the source of the cost of....
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....tal Valuation Officer if he had at all been consulted, gave the cost of construction differently and, as such, even two technically qualified persons did not agree on the cost of construction. Therefore, on the mere difference in the two figure penalty could not be imposed and in the penalty proceedings a fresh look be given to these facts and penalty proceedings dropped. The assessee particularly projected to the ITO that it is not guilty of conscious concealment and if there is any fault in accordance with law, because of different valuations adopted than actual cost of construction, the fault is a technical one, for which penalty could not be imposed upon the assessee. Ultimately, a prayer was made that the penalty proceedings be dropped....
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.... which no basis has been explained in the impugned penalty order. 8. From what is spelt out above it is clear that no case has been made out either of concealment or of furnishing inaccurate particulars by the assessee. This is apparently a case where penalty has been levied merely because a difference arose between the estimated cost of construction by the ITO and the actual cost of construction claimed to have been made by the assessee. The ITO did not himself find any investment in the house, for which the assessee had not given any explanation or had not shown any expenditure. Therefore, it is a clear case where the charge of concealment cannot be fastened upon the assessee. It is to be noted that the ITO had gone on the premise that....
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....within the meaning of the Explanation, is required to prove that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. Ordinarily and generally, there cannot be any direct evidence to prove such a fact. The assessee merely has to place materials of the primary facts or the circumstances which in all reasonable probability would show that he was not guilty of any fraud or gross or wilful neglect. He may discharge this onus by placing the facts found in the assessment order to show that the facts found therein had not in the least given an inkling of fraud or gross or wilful neglect on the part of the assessee and, therefore, it must be held without proof of any other fact that there was....