TaxTMI 
TaxTMI 
2003 (4) TMI 6
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....iii) Whether the Tribunal was right in law in upholding the levy of penalty under section 271(1)(c) for addition of Rs. 15,000 as unexplained investment that is deemed income under section 69A of the Income-tax Act, 1961, and particularly in view of Explanation 1 read with the proviso thereto to section 271(1)(c)? (iv) Whether, on the facts and in the circumstances of the case, that the assessee's husband was having substantial income from grains business up to the time of her death in August, 1974, and the assessee herself had agricultural income of about Rs. 10,000 yearly from 1969, is the finding of the Tribunal unreasonable and perverse that the investment did not come out of the savings from such income, but was unexplained investment, so as to attract penalty under section 271(1)(c)? Assessment year 1976-77: (i) Whether there was evidence to hold that the assessee concealed the particulars of income, so as to attract penalty under section 271(1)(c) of the Income-tax Act, 1961? (ii) Whether the order of the Tribunal upholding the levy of penalty without a clear finding about the facts and omitting material facts from consideration is vitiated in law? (iii) Whether ....
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....estment was made from undisclosed sources. The Tribunal has disbelieved the theory of assessees regarding investment made by her in this regard. The assessee has neither produced any additional evidence or additional circumstance in the penalty matter and the explanation given in the quantum matter was also not sufficient to hold that the explanation of the assessee was bona fide or she has discharged the onus, which lay on her under section 271(1)(c). The finding of the Commissioner of Income-tax (Appeals) is based on the sound reasoning that the assessee has concealed the income and thereby is guilty of levy of penalty under section 271(1)(c). The finding of the Commissioner of Income-tax (Appeals) for both the assessment years is, therefore, upheld. The Assessing Officer will work out the penalty as per the direction of the Commissioner of Income-tax (Appeals) in the impugned orders." Thereafter, an application under section 256(1) of the Income-tax Act was filed for referring the proposed questions to this court but the Tribunal negatived the prayer as it was of the view that the questions were in the realm of facts more so, when no material was brought on record by way of e....
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....tal income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." It is pertinent to state that the aforesaid provision has been amended many times but the quoted provision was applicable when the controversy was in issue. Mr. Shrivastava, learned counsel, has submitted that in the case of CIT v. Ganesh Prasad Badriprasad and Co. [1998] 231 ITR 951 this court had dealt with the concept of the Explanation and in that context held as under: "As per Explanation 1 to section 271(1)(c), if the assessing authority or the concerned....
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.... was justified in deleting the penalty." In that background after so holding the Division Bench answered the reference, as far as this aspect is concerned, in the following terms: "... assessee had not concealed the particulars of income or furnished inaccurate particulars of such income within the meaning of section 271(1)(c) and was not liable to penalty." The submission of Mr. Shrivastava is that onus is on the Department while taking recourse to Explanation and that is what has been held in the aforesaid judgments. Learned counsel has also commended us to the decision rendered in the case of CIT v. S. P. Jain [1973] 87 ITR 370 (SC). In the aforesaid case the apex court dealt with what is basically the question of jurisdiction of the High Court or the Supreme Court while dealing with the matters of this nature. We profitably quote their Lordships: "The High Court and the Supreme Court have always the jurisdiction to interfere with the findings of the Appellate Tribunal if it appears that either the Tribunal has misunderstood the statutory language, because the proper construction of the statutory language is a matter of law, or it has arrived at a finding based on no....