Satish Chandra, C.J.
1. For the assessment year 1967-68, the assessee filed a return of Rs. 21,628. He then filed a revised return showing an income of Rs. 32,244. The ITO assessed him on a total income of Rs. 59,513 which was reduced in appeal to Rs. 47,753. The increase in the assessed income was largely because of several items of losses having been disallowed.
2. Finding that the returned income was less than 80% of the assessed income the ITO referred the case to the IAC for consideration whether it was a fit case for imposition of penalty. The Commissioner, after hearing the assessee, levied a penalty of Rs. 30,000 because the difference in the assessed and returned income was Rs. 27,269.
3. The assessee went up in appeal to the Tribunal. The Tribunal held that in so far as the business income in Indian Oil products was concerned the assessee was guilty of gross or wilful neglect inasmuch as he did not maintain any accounts of the business. But since the difference in the returned and the assessed income from the business in Indian Oil products was less than 20% the assessee was not liable to penalty in respect of that item of income. It further held that, in respect of other items of income, it was not possible to attribute gross or wilful neglect on the part of the assessee for a variety of reasons. In this view, it was held that no penalty was leviable either under the substantive provisions of Clause (c) or under the Explanation to Section 271(1)(c). On these findings, the penalty was cancelled.
4. At the instance of the Commissioner, the Tribunal has referred, for our opinion, the following questions of law :
'1. Whether for the purposes of the Explanation to section 271(1)(c) of the Income-tax Act, 1961, the difference of more than 20% between the returned and correct income, could be validly computed by having regard to individual sources of income, though they may have all been clubbed together for purposes of assessment ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in cancelling the penalty imposed upon the assessee?'
5. Section 271 makes one liable to penalty on failure to furnish the return or comply with the notices or for concealment of income or furnishing inaccurate particulars of such income. When one either conceals or furnishes inaccurate particulars of his income, Clause (c) is at once attracted and the liability to penalty accrues to the assessee. An assessee is liable to file a return of his total income for each assessment year. An individual assessee may have several sources of income but the liability to assessment of tax depends upon the total income. Under the Income-tax Act, the total income of an assessee is the assessable unit, not the individual sources, separately or independently. In the present case, the assessee had income from the business of Indian Oil products, from shares in several partnership firms and also from the business of running a taxi and a truck. He filed a return of Rs. 21,628 in the first instance and a return of Rs. 32,244 as a revised return. These amounts represented his total income from the various sources.
6. The Explanation appended to Clause (c) begins by saying 'where the total income returned by any person is less than eighty per cent. of the total income as assessed.....' The Explanation thus leaves no room for doubtor debate that the difference has to be between the total income returned and the total income assessed. The fact that the difference between the returned and the assessed income from each individual source may be less than 80% is of no relevance. The only material and relevant fact is the total income for computing the income which is returned or that which is assessed. We regret that we are unable to subscribe to the opinion expressed by the Tribunal that since the difference between the returned and the assessed income from the business of the assessee in Indian Oil products was less than 20%, the assessee was not liable to penalty, by reference to that item of income.
7. There is no denying the fact that the difference between the total income returned and the total income assessed was more than 20% and hence the assessee became liable to penalty. It was for the assessee to establish that the difference was not due to any fraud or gross or wilful negligence on his part. The fact that an assessee may be found to be grossly or wilfully negligent, in declaring the correct income from one or more out of the several sources of income, may have a bearing on the quantum of the penalty that the authority may think fit to impose. But it has no relevance so far as liability to penalty is concerned.
8. In the result, we answer both the questions referred to us in the negative in favour of the department and against the assessee. Since no one has appeared on behalf of the assessee, there will be no order as to costs.