Surinder Singh, J.
1. This is a petition under Section 256(2) of the I.T. Act, 1961 (hereinafter referred to as 'the Act'), filed by the Commissioner of Income-tax, Amritsar-II, Amritsar, against M/s. Dewan Singh Gurbachan Singh of Amritsar, in the circumstances which are these. The petitioner filed an application under Section 256(1) of the Act to the Income-tax Appellate Tribunal, Amritsar Bench, requesting it to draw up a statement of the case and to refer to this court the following question which is claimed to be a question of law :
'Whether, on the facts and in the circumstances of the case, the Tribunal was correct in deleting the penalty of Rs. 28,000 levied in this case under Section 271(1)(c)?'
2. The Appellate Tribunal dismissed the reference application filed by the Department and while doing so, recorded a finding that in the present case it was only after appraising the entire material on the record that the Tribunal came to the conclusion that the assessee was not liable to pay penalty under Section 271(1)(c) of the Act. It was also held that the above finding was a pure finding of fact and hence no reference lay to this court. The Tribunal relied upon various decisions of the Supreme Court and the High Courts in support of its conclusion, as above. It is with a view to impugn the said refusal of the Tribunal to refer the above mentioned question to this court for opinion that the present petition has been filed with a prayer that a direction be issued to the Tribunal to refer the question of law mentioned above to this court.
3. For a better appreciation of the matter, the facts may be briefly noticed. The respondent-firm deals in foodgrains. During the course of the assessment proceedings for the assessment year 1969-70, the ITO came to know that the assessee had deposited toria in the Central Warehousing Corporation, Bhagtanwala Gate, Amritsar. The quantity and the value of the article deposited are mentioned in the statement of facts, but the same are not material for the purpose of the present petition. The assessee was called upon to explain the above circumstance and by way of explanation he filed affidavits of certain firms to show that these firms had, in fact, deposited their own goods with the respondent-firm for storage. The explanation of the respondent was accepted by the ITO in so far as the goods in the name of M/s. Nand Lal Sohan Lal were concerned but in regard to the other firms, he rejected the explanation furnished by the respondent on the ground that sufficient evidence hadnot been produced by the respondent in support of their contention. The ITO estimated the unexplained investment at Rs. 45,000 and added this amount as concealed income from undisclosed sources. He also initiated penalty proceedings under Section 271(1)(c) of the Act.
4. The respondent filed an appeal before the AAC against the aforesaid decision of the ITO who partly accepted the same, holding that the unexplained investment was only to the tune of Rs. 28,000. On a further appeal to the Income-tax Tribunal, the finding of the AAC was upheld to the effect that the addition of Rs. 28,000 as undisclosed income had been correctly made. As regards the penalty proceedings, the Tribunal cancelled the same holding that there was no evidence or material on the record to establish that the value of the said stock added towards the total income represented income which the assessee had consciously concealed. The Tribunal relied upon the decision of various High Courts in this respect.
5. Against the aforesaid decision of the Tribunal, the Department filed a reference application which, as already noticed, was declined on the dual ground, namely, that in the present case there is no evidence to conclusively establish that the sum of Rs. 28,000 added towards the total income of the assessee represented the assessce's 'real income' which was concealed. The other finding of the Tribunal is that the first finding as mentioned above is a pure finding of fact and hence no reference lies to the High Court.
6. The learned counsel for the petitioner, Mr. Ashok Bhan has referred to the provisions of Section 271(1)(c) of tae Act to contend that the respondent had not disclosed the fact regarding the storage of toria and had, thus, concealed his income, as postulated under the aforesaid provision. He further submits that as per the Explanation added to Section 271 by the Finance Act, 1964, where the total income returned by any person is less than 80 per cent, of the actual total income as assessed, such person is to be deemed to have concealed the particulars of his income and the onus of proving that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, lies upon him, i. e., the assessee. The counsel, therefore, urges that there was no justification for cancelling the penalty. The contention is, however, not tenable. It is obvious that resort to the Explanation noticed above can be had only in case there is a finding that the total income returned by the assessee is less then 80 per cent, of the total income assessed. No such specific finding is available in the present case.
7. The second contention of the learned counsel is that there was enough material on the record to inculpate the assessee and the same was not duly considered. In this regard, the Tribunal returned a clear findingthat 'there is no evidence to conclusively establish that the sum of Rs. 28,000 added towards the total income of the assessee represented the assessee's real income which was concealed'. It is apparent that the sufficiency or otherwise of the evidence to establish whether it was a case of concealment, is a pure question of fact and not a question of law. A catena of authorities is not required on this proposition. However, a reference in this connection may be made to Basant Lal Om Parkash v. CIT , where it was laid down by this court that a case for imposition of penalty has to be found on the material on record and it is essentially a question of fact whether in a certain case penalty is called for or not. It was further held that the Tribunal having given valid reasons for supporting its order, no question of law arose for consideration by this court.
8. In the circumstances noticed above, the Tribunal was quite correct in refusing to refer the proposed question to this court for opinion. The present petition is, therefore, dismissed, but with no order as to costs.