TaxTMI 
TaxTMI 
2002 (11) TMI 42
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....he details of the persons in whose names the credits are appearing in the books. The assessing authority thereupon issued summons to some such creditors which were returned. Some of the creditors who appeared before the assessing authority had denied such credits and some of them admitted the credits against certain cases only. At that stage, the assessee filed a letter agreeing to make an addition of a sum of Rs. 5,87,438 representing the peak credit in the said accounts on March 30, 1984. The assessing authority had entered a finding in the assessment order that in the circumstances explained, a sum of Rs. 5,87,438 being the principal credit in the said accounts on March 30, 1984, is treated as the assessee's income under section 68 of the Act. In the assessment order, it is further stated that penalty proceedings under section 271(1)(c) are initiated separately. The assessing authority thereafter issued a notice under section 271(1)(c) of the Act. The assessee filed detailed objections to the said notice. However, the assessing authority by order dated March 22, 1990, imposed a penalty of Rs. 3,65,000 under section 271(1)(c) of the Act. The assessee took up the matter in appeal ....
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....o in clause (c) in addition to the tax payable by him, which shall not exceed three times the amount of the tax sought to be evaded by reason of the concealment of his income. Explanation 1 to the said sub-section provides that: "Where in respect of any facts material to the computation of the total 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) 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 subsection, be deemed to represent the income in respect of which particulars have been concealed." In the assessment proceedings, when the Assessing Officer sought clarification with regard to the credits found in the books of account, the assessee had furnished the names of the persons in whose....
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...., 1988, when he was to have been examined. His examination was postponed to March 23, 1988. The assessment was completed on March 28, 1988, by adding Rs. 5,87,000 being the peak credit which was offered by the appellant. It is stated that the abovesaid offer was made in good faith and no penal action should have been initiated. The appellant further points out that they were not aware of the denial of credits by Shri A. Krishnadas and G. Sivaramakrishnan since the statements taken from them have not been put to the appellant and the appellant was not given any opportunity to rebut the assertions therein. Shri G. Sivaramakrishnan has particularly confirmed having given loan of Rs. 45,000. Referring to the Assessing Officer's version in the penalty order that the appellant was left with no alternative but to agree for the assessment, the appellant has contended that the credits were not established as bogus. For such an establishment certain procedures to be followed. The creditors should have been confronted with the confirmation filed by them and thereafter the appellant should have been given an opportunity to cross-examine them. Evidence obtained behind the back of the appellant ....
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....of Bangalore. Shri Sivaramakrishnan has partly confirmed having given loan of Rs. 45,000. The examination of both Shri A. Krishnadas and Shri G. Sivaramakrishnan was conducted behind the back of the appellant and no opportunity was given to the appellant to rebut the assertions made therein. While concluding the argument it is stated that the explanation given by the appellant was not wrong and that the Department had not discharged the onus. There was no mens rea involved in this case. There was no deliberate or conscious concealment of income and that the appellant had offered the income in good faith hoping that no penalty would be levied." It is with reference to the said contentions that the first appellate authority has taken the view that the assessing authority has not established the charge of concealment. The Tribunal has also endorsed the said view. According to us, as per the provisions of Explanation 1(B) to section 271 of the Act, the burden is on the assessee to substantiate the matters stated in the explanation. In the instant case, the Assessing Officer while completing the assessment did not afford any further opportunity to the assessee to substantiate his expl....