1985 (5) TMI 6

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....x Act, 1961 (hereinafter referred to as "the Act"). The question that falls for consideration and referred to us is "Whether, on the facts and in the circumstances of this case, the onus was on the department to prove that the assessee concealed his income or furnished inaccurate particulars thereof, or that the failure to return the correct income did not arise from any fraud or any gross or w....

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....g Assistant Commissioner appealed to the Appellate Tribunal. The Tribunal set aside the penalty on two counts, firstly, that there was no mens rea in the concealment, which was essential for the imposition of penalty and, secondly, that the additions and disallowances were just made on estimate and that they had not been proved by cogent materials by the Department that the assessee earned some pr....

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....h March, 1985). The decision of Sandhawalia C.J., which was the leading judgment, laid down as follows (at page 302) : "A close reading of the latter part of the Explanation would indicate that once it is held that it is applicable to the case of an assessee, it straightaway raises three legal presumptions against him. For clarity's sake, these may be formulated as under: (i) that the amount....

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....e that there was no failure on the part of the assessee to return the correct income have to be shown by the assessee. The Tribunal, therefore, erred in law in setting aside the penalty on the ground that the Department has not proved by cogent materials that the assessee had earned profits other than those shown in the books, which had not been accounted for. The onus was not upon the Department,....