2007 (3) TMI 218

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....w under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), to this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in confirming the cancellation of penalty of Rs. 35,000 imposed under section 271(1)(c) of the Act considered along with Explanation 1 thereto inserted with effect from April 1, 1976?" The refe....

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....the basis of peak credit after giving allowance to the debit entries in the account of the creditors and the addition on account of unexplained cash credit was sustained at Rs. 44,500. In view of the above, the Assessing Officer took the view that there was a concealment of Rs. 64,200 on the part of the assessee for the purpose of section 271(1)(c) read with Explanation 1 and imposed a penalty ....

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.... 76 ITR 696. It was submitted that penalty would not be imposed under the Explanation unless it was shown that the amounts in question were really the income of the assessee. The Tribunal observed that there was no finding of concealment in the penalty order. However, an extract from the penalty order has been given, where the Assessing Officer has held that "the assessee had no plausible explanat....

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....ion or offered an explanation, which was found to be false or offered an explanation which he was not able to substantiate, then the amount added would be deemed to represent the income in respect of which particulars have been concealed. There was a proviso below the Explanation according to which clause (B) would apply in respect of any amount added as a result of rejection of any explanation of....