1982 (11) TMI 11

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....the assessee-firm had itself shown the sales tax liability of Rs. 19,131 for the quarter ending March 31, 1970, only, the Appellate Tribunal was justified in law in accepting the explanation of the assessee-firm that Rs. 29,735 had been withdrawn by its partner on March 31, 1970, for meeting the sales tax liability of the assessee for the year 1969-70 ? (2) Whether, on the facts and in the circumstances of the case, there was any legal or admissible material before the Appellate Tribunal to hold that the assessee-firm had discharged the onus placed upon it under the Explanation to section 271 (1)(c) ? (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has misdirected itself in cancelling the penalty....

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....oncealment of the amount of Rs. 29,735. Since the Explanation to s. 271(1)(c) was applicable to the case, because the income returned was less than 80% of the income assessed after the AAC's order, the onus was on the assessee to establish that the failure to return the correct income did not arise from any fraud or gross or wilful neglect. The action of the respondent-assessee in withdrawing the said amount from the cash book and not crediting the same to the sales tax account was considered mala fide and fraudulent and, therefore, a penalty of Rs. 40,000 was levied by the IAC. Before the Tribunal the statutory onus in question was sought to be discharged by explaining that a sum of Rs. 29,735 was withdrawn to meet sales tax liability. Cop....