Allahabad High Court
Commissioner Of Income-Tax vs Mata Prasad on 23 November, 2004
Equivalent citations: [2005]278ITR354(ALL)
Bench: R.K. Agrawal, Prakash Krishna
JUDGMENT
1 The Income-tax Appellate Tribunal, Allahabad has referred the following questions of law under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion of this Court :
"1. Whether, on the facts and in the circumstances of the case the Tribunal was legally correct in reviewing its own finding recorded in the quantum appeal and in holding that earlier finding was not correct on fact ?
2. Whether, on the facts and in the circumstances of the case, the . order of the Tribunal is vitiated as it has failed to consider the concealment admitted by the assessee himself in the revised return ?
3. Whether, on the facts and in the circumstances of the case, the Tribunal is legally correct in cancelling the penalty for concealment ?"
2. The reference relates to the assessment year 1973-74.
3. Briefly stated the facts involved in the present case are as under :
The reference relates to the assessment year in question in respect of penalty imposed under Section 271(1)(c) of the Act. The respondent is a money-lender and he derived income from the pawning business. The Income-tax Department conducted a search on December 10, 1974. The respondent filed a return of income declaring an income of Rs. 7,500 which was subsequently revised on March 25, 1976, disclosing an income of Rs. 12,750 which included Rs. 250 as income from property and Rs. 5,000 being the income disclosed under the voluntary disclosure scheme. The Income-tax Officer had made assessment of income of Rs. 92,940 which was reduced by the Tribunal to Rs. 55,250. While doing so the unexplained investment in the business was taken by the Tribunal at Rs. 38,000. The Income-tax Officer initiated proceedings under Section 271(1)(c) of the Act and imposed penalty of Rs. 42,500. The penalty was imposed on the ground of unexplained investment of Rs. 38,000 and investment in the money-lending business of Rs. 4,500. The penalty was also confirmed by the Commissioner of Income-tax (Appeals). In further appeal the Tribunal has deleted the amount on the ground that in business the credits rotated over a period of 2 to 3 months. On this the Tribunal held that the assessee was able to explain the source of Rs. 37,000 out of the investment and it was only the balance of Rs. 38,000 which remained unexplained. Therefore no penalty was leviable.
4. Heard Sri Shambhu Chopra standing counsel for the Revenue. Nobody appears on behalf of the assessee.
5. We find that Section 271(1)(c) of the Act was applicable in the present case, yet the respondent has been able to discharge the onus which lies upon him. The Tribunal on appreciation of evidence has come to the conclusion that Rs. 37,000 was sufficient to meet the turnover of business during the year in question and thus there was neither any fraud or wilful concealment on the part of the respondent-assessee. The findings recorded by the Tribunal are based on appreciation of evidence and material on record and do not suffer from any legal infirmity. It is well settled that the findings recorded on the quantum side, in the assessment order is only a piece of evidence, can be relied upon in the penalty proceedings and the Tribunal is well within its jurisdiction to record fresh finding and it will not amount to reviewing its earlier order.
6. In view of the foregoing discussion we answer the aforesaid questions Nos. 1 and 3 referred to us in the affirmative and question No. 2 in the negative, i.e., in favour of the assessee and against the Revenue. There shall be however, no order as to costs.