1984 (7) TMI 32

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.... Out of the many questions which the CWT, Jullundur, wanted the Tribunal to refer, it referred the following solitary question for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding having relied on the observations of the Punjab and Haryana High Court on page 518 in the case of Karnail Singh [1974] 94 ITR 505, that the circumstances do not lead to the reasonable and positive inference that the assessee's explanation is false and, therefore, the assessee must be held to have proved that there was no fraud or gross or wilful neglect on his part ? " Mr. Ashok Bhan, learned counsel appearing for the Revenue, has canvassed that the Division Bench decision in Addl. CIT ....

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....the Legislature, by adding the Explanation to s. 271(1)(c) of the I.T. Act, did not change the position of law as laid down in CIT v. Anwar Ali [1970] 76 ITR 696 (SC), as is evident from the following observations of the Full Bench (p. 670): " With the greatest respect, therefore, the view expressed in Karnail Singh's case [1974] 94 ITR 505 (P & H) that no change whatsoever had been effected by the amendment in clause (c) of s. 271(1) and the addition of the Explanation thereto, is untenable ...... Further, the observations made in Indeed, taking such a view would remove the very cornerstone of the Explanation and render it nugatory. This is so because of the fact that unless the assessed income is accepted as the correct income of the a....

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....nance Act of 1964 was to bring about a change in the existing law. Consequently, the ratio of Anwar Ali's case [1970] 76 ITR 696 (SC), which had considered the earlier provision of s. 28(1) of the 1922 Act is no longer attracted. The true legal import of the Explanation is to shift the burden of proof from the Department on to the shoulders of the assessee in the class of cases where the returned income was less than 80 per cent. of the income assessed by the Department. In this category of cases, the Explanation raises three rebuttable presumptions against the assessee as spelt out in detail above in para. 16 of this judgment. The onus of proof for rebutting these presumption lies on the assessee. This burden, however, can be discharged (a....