TaxTMI 
TaxTMI 
1982 (1) TMI 27
X X X X Extracts X X X X
X X X X Extracts X X X X
....er account books were not maintained by the assessee, as, according to him, there was no check on the expenses and the purchase price paid. This assessment was confirmed by the AAC. Thereafter, invoking the Explanation to s. 271(1)(c) of the I.T. Act, 1961, the case had been referred to the IAC, under s. 274(2). The IAC, holding that the Explanation to s. 271(1)(c) was attracted and that the assessee had not discharged the burden laid on him by the Explanation, imposed a penalty of Rs. 7,164. The assessee appealed against the order of penalty. While allowing the appeal, the Appellate Tribunal recorded a finding that the assessee had maintained the books as it was practicable for it to maintain and that it was not the case of the Reven....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., on the facts and in the circumstances of the case, the Tribunal erred in holding that the penalty imposed on the assessee under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 1964-65 was not tenable ?" There is some misapprehension about the first question which has been raised and referred by the Tribunal. The question posed for opinion seems to proceed on the footing that the Tribunal has taken the view that even in the face of the Explanation to s. 271(1)(c), in a case where the income returned is less than 80 per cent. of the total income assessed, the burden is still on the Department to prove that the difference between the returned income and the income assessed had arisen due to fraud or any gross or wil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the total income returned by any person is less than eighty per cent of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return, the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section." It can hardly be doubted that by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ks in such a manner as it was practicable for it to maintain. Now, on the finding that there was no suppression of the figures of the purchases and/or sales and the account books have been maintained in such a manner as was possible in the facts and circumstances of the case, even assuming that the presumption contemplated by the Explanation arose, that presumption stood rebutted by the fact that there was no suppression of any sales or inflation of any purchases. Mere fact that the ITO has proceeded to estimate the net profit at figure higher than what was disclosed by the assessee, the conclusion cannot necessarily follow that there is a failure to return the correct income arising out of fraud or any gross or wilful neglect on the part o....