TaxTMI 
TaxTMI 
1998 (6) TMI 538
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....arta's wife. The assessee subsequently made a voluntary disclosure of his income. Fresh returns were also filed by him. Proceedings were initiated against the assessee in respect of the assessment years 1968-69 to 1973-74. In the present proceedings, we are concerned with household expenses of the assessee for two years 1968-69 and 1969-70. There were nine members in the family of the assessee. Considering the large family of the assessee, his social status, the fact that three daughters were studying and further that three daughters got married between 1968-69 and 1974-75, the Income-tax Officer (ITO) held that the household expenses shown by the assessee were extremely low. He, therefore, estimated such expenses at Rs. 11,000 adding Rs. 6,685 for the assessment year 1968-69 and at Rs. 12,000 adding Rs. 6,967 for the assessment year 1969-70. By an order dated March 28, 1977, the Income-tax Officer also directed to issue notice to the assessee to show cause as to why penalty should not be imposed on him under section 271(1)(c) read with the Explanation and for late submission of the return. Pursuant to the above orders, the show-cause notices appear to have been issued to ....
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....d in the assessment proceedings. He submitted that the two proceeding's are entirely different, i.e., assessment proceedings and proceeding's for imposition of penalty on the assessee. Even if in the assessment proceedings, the authorities were not satisfied regarding the quantum of household expenses for the assessment years 1968-69 and 1969-70 and the orders were passed increasing the said amount, an order of imposition of penalty could not have been passed by the authority on that basis. It was submitted that the burden which was on the Department to prove concealment of income on the part of the assessee under section 271(1)(c) of the Act had not been discharged and the orders were, therefore, unlawful. It was submitted that reasonable explanation was submitted by the assessee in the form of an affidavit which is at annexure G. It was stated that the assessee was an orthodox man and the family was also living in a simple way and the yearly expenses was very meagre. According to counsel, even if the said explanation was not accepted in the assessment proceedings and the income was revised, it would not ipso facto result in reaching a conclusion that there was concealment of inco....
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....he was satisfied that the domestic expenses disclosed were totally inadequate and the assessee had undisclosed income from other sources from which he supplemented the disclosed drawing's. Accordingly, the orders passed by the Income-tax Officer were confirmed. When the matters reached the Tribunal, the Tribunal vide its order dated October 29, 1982, observed in para. 4 as under: "All these explanations may be true but even then the withdrawal for household expenses appears to be unbelievably low." (emphasis supplied) The Tribunal proceeded to observe: "They are too low that not only third persons cannot believe them but we cannot accept that the assessee himself could have stated them with any genuine belief. Although in this case the addition has been made in such circumstances that it can be said that the assessee did have the income which was ultimately upheld by the Tribunal and which he knew he had." Looking to all the orders passed by the authorities, it is clear that the assessee was called upon to show cause as to why penalty should not be imposed on him on the ground that he had "deliberately concealed" the particulars of his income. It was not a case in which....
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....rilal [1979] 120 ITR 752 (Guj) and in CIT v . Navnitlal Pocha-lal [1995] 213 ITR 69 (Guj), this court following Anwar Ali's case [1970] 76 ITR 696 (SC), held that even the admission of an assessee that a particular amount belonged to him is not sufficient to entail penal consequences and an order of penalty cannot be imposed on him on the basis of such admission. It is necessary that such admission must relate to the income of the assessee and that it must have either been admitted or proved that such income was for a particular year. In the absence of such admission and/or finding no order of penalty can be imposed on the basis of the order of assessment passed by the authorities (vide Vinaychand Harilal's case [1979] 120 ITR 752 (Guj)). In Navnitlal Pochalal's case [1995] 213 ITR 69 (Guj), this court observed that on the ground that the proceedings were initiated and the amount was increased, the Revenue cannot be said to have discharged its burden that the amount represented concealed income of the relevant accounting year and no penalty can be imposed on a mere finding that in the assessment orders, the amount was increased. In the instant case, as observed above the proceed....