TaxTMI 
TaxTMI 
2005 (5) TMI 61
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....he absence of a finding of bona fide in the absence of findings (or consideration) contemplated under Explanation 1(B) to section 271(1)(c), the Tribunal is justified in relying on the same and in reaching the conclusion? 3. Whether, on the facts and in the circumstances of the case and when the statute contemplates a finding of 'bona fide' (in discharge of onus) on the assessee, does the finding that 'there is nothing to show that the assessee's claim of receipt of tin sheets on loan from the sister concern is not bona fide', 'Merely because there is no entries in the books it would not be correct to say that the explanation was not bona fide' would amount to finding of 'bona fide'? 4. Whether, on the facts and in the circumstances o....
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....bsp; 30,802 (ii) Investment in unaccounted purchase of tin sheets 1,62,393 (iii) Unaccounted purchase of tin containers 29,948" The assessment became complete. The explanation offered by the assessee regarding movement of goods from the firm run in the same premises, etc., was not accepted. The Assessing Officer also levied penalty under section 271(1)(c) amounting to Rs. 1,20,000. That was affirmed by the Commissioner. However, the Tribunal set aside the penalty imposed on account of unaccounted purchase of tin sheets and tin containers. The explanation offered by the assessee with regard to the above was as follows: ....
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....tion under the Explanation to section 271(1)(c) can be displaced by the assessee proving that the failure to return the correct income did not arise from any fraud or gross or wilful neglect and the quantum of proof necessary would be that required in a civil case, namely, preponderance of probabilities.' True, the assessee could not prove with the books of account of M/s. Sastha Enterprises that he had received on loan tin sheets and tins from that concern. Even if the amounts representing as the cost of investments in sheets and tins could be assessed as the income of the assessee, can it be said that the failure to return those amounts as his income arose from any fraud or gross or wilful neglect on his part? We do not think so. In th....
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....s referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income: Provided that, if in a case falling under clause (c), the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished exceeds a sum of twenty-five thousand rupees, the Income-tax Officer shall not issue any direction for payment by way of penalty without the1 previous approval of the Inspecting Assistant Commissioner: Explanation 1.-....
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.... relying on the Full Bench decision, the Tribunal found that the Department was not able to prove that the explanation offered by the assessee is not correct. The observation of the Tribunal regarding initial burden to prove is against the provisions of section 271(1)(c) as amended. In Deputy CIT v. K. Suresh Kumar [2002] 253 ITR 640, a Division Bench of this court also held that the initial burden is on the assessee to prove that the explanation offered is bona fide. Here the Tribunal erroneously casts the burden on the Department, whereas there is no finding that the initial burden was discharged by the assessee. In this case, admittedly, there are no registers or account books to show that the goods of the sister concern were taken on lo....