: M. R. Sharma, J. - In this petition u/s 256(2) of the IT Act, 1961 (hereinafter called the Act), a prayer has been made on behalf of the Revenue that we should direct the IT Appl. Tribunal, Amritsar Bench, Amritsar, to state the case and to refer the following question of law to us for opinion :
'Whether on the facts and in the circumstances of the case, the Tribunal has misdirected itself in cancelling the penalty of Rs. 11,000/- imposed u/s 271(1)(c) of the IT Act, 1961 ?'
2. The Appl. Tribunal decided two appeals of the assessee for the asst. yrs. 1960-61 and 1961-62. The original assessment for the year 1960-61 was completed on 22-3-1965. The assessee was taxed on a total income of Rs. 48,022/-. This assessment was, however, set aside by the AAC of IT on 23-7-1969. In the meantime, the ITO found that a sum of Rs. 5,600/- was credited in the books of account of the assessee on 29-10-1959, in the name of M/s. Gajanand Goel & Bros., Mandi Gobindgarh. On a comparison of the entries, the ITO found that the debit entry in the books of the aforementioned firm was made in the name of the assessee on 20-11-1955. The ITO, therefore, reopened the assessment and issued a notice to the assessee u/s 148 of the Act. This time the assessment was completed on 17-2-1971, after the assessee had agreed to the addition of Rs. 5,600/- towards its total income. The ITO also initiated proceedings u/s 271(1)(c) of the Act and since the minimum penalty imposable exceeded a sum of Rs. 1,000/-, he referred the case to the IAC of IT u/s 274(2) of the Act.
3. Similarly, for the asst. yr. 1961-62, the ITO found a sum of Rs. 11,000/- purporting to have been deposited by M/s. Gajanand Goel & Bros., Mandi Gobindgarh, in the books of account of the assessee. The assessee also agreed to have this amount added towards its total income, whereafter on 17-2-1971, it was assessed to a total income of Rs. 91,030/-. The ITO initiated penalty proceedings int this case also and reported the case to the IAC of IT because the penalty imposable was in excess of Rs. 1,000/-.
4. In the penalty proceedings for both the years, the assessee submitted the following reply :
'1. That amount of Rs. 5,600/- was added in the income of the assessee in the asst, yr. 1960-61 and Rs. 11,000/- in the asst. yr. 1961-62 on account of difference in the date of credit in the account of M/s. Gajanand Goel. We are having a regular running account with the above party. It was pointed out to the ITO, that the amount was actually received from the said party on 29-10-1959 and not on 20-11-1959. The same was credited in the books on the date of its receipt. It was merely to bring an end to the matter that the assessee surrendered the amount, otherwise there has been no such income. It was also agreed that no penalty proceedings will be started hereby because an amount has been surrendered will not make it sufficient ground for the concealing of any income. There was no such income which could be said to have been concealed. Shri Rajinder Kumar Karta of the HUF expired on 9-1-1971 and earlier to this he was not felling well for sufficient time. He wanted peace and as such the matter was brought to end.
2. That the ITO, who framed the assessment in this case has nowhere established the fact that the income from the said source was concealed. There has been nothing to establish and give rise to the inference that the disputed amount represents income. The entirety of circumstances does not point out that the disputed amount reresents income and that the assessee has consciously furnished the particulars of his income or had deliberately furnished in accurate particulars (70 ITR 369; CIT v. Khoday Eswarsa & Sons, : 83ITR369(SC) and CIT v. N. A. Mohamed Haneef : 83ITR215(SC) .
The IAC of IT did not accept the explanation offered by the assessee and imposed penalties in the sums of Rs. 5,600/- and Rs. 11,000/- u/s 271(1)(c) of the Act for the asst. yrs. 1960-61 and 1961-62 respectively.
5. The assessee went up in appeal before the Appl. Tribunal which was allowed. The Tribunal observed that Shri Rajinder Kumar, the Karta of the HUF, was unwell at the material time and died on 9-1-1071, i.e., shortly after the submission of the revised returns. The serious illness of the assessee and the date of his death were not disputed before the Tribunal. In fact, the illness of Shri Rajinder Kumar, the Karta of the HUF, had been mentioned in the letter dated 9-4-1970 addressed by the assessee to the AAC of IT. It was also mentioned therein that on account of mental depression Shri Rajinder Kumar was unable to sign the routine papers and to attend to other work in connection with the business. The Tribunal accepted this explanation and observed that in its opinion the serious illness of the Karta of the HUF was a material factor which had prompted the assessee to surrender the sum of Rs. 5,600/- and Rs. 11,000/- for the two assessment years.
6. Feeling aggrieved against the order passed by the Appl. Tribunal, the Revenue filed an application for the statement of the case to us which was declined. Hence the present petition.
7. We have heard the ld. counsel for the parties. We might observe at this place that the sums of Rs. 5,600/- and Rs. 11.000/- were mentioned in the 3rd columns of the returns for the relevant years. Mr. Bhagirath Dass, the ld. counsel for the assessee, submitted that the assessee agreed to be assessed at higher figure for the two relevant years because it did not intend to join issue with the Revenue on account of the serious illness of the Karta of the HUF. The ld. counsel also submitted that apart from the fact that the assessee had surrendered these amounts voluntarily, the Revenue collected no other evidence to show that these two amounts represented concealed income of the assessee.
8. Mr. Awasthy, the ld. counsel for the Revenue, on the other hand, submitted that once the assessee itself revised its returns and agreed to be assessed at higher figures for the two relevant years, it must be held that it had deliberately concealed its income for those years. In support of this submission, Mr. Awasthy, has relied upon a Division Bench judgment of this Court in Mahavir Metal Works v. CIT, Punjab, . It was observed therein as under :-
'It is well-settled by now that the penalty proceedings, are of a penal nature and it is for the department to establish that the assessee was guilty of concealment of the particulars of income. The mere fact that the assessee has given a false explanation, does not prove that the disputed amount constitutes, does not prove that the disputed amount constitutes income of the assessee. Moreover, the finding given during the course of the assessment proceedings that a particular receipt is income after rejecting the explanation given by the assessee as false would, prima facie, be sufficient for establishing in the penalty proceedings that the disputed amount was the assessees income, but it must be remembered that since the said proceedings are of penal nature, the burden is on the department to prove that a particular amount is revenue receipt. The finding given in the assessment proceedings that the explanation furnished by the assessee was false cannot be taken to be conclusive. Before the penalty can be imposed, the entirety of the circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars or had deliberately furnished in accurate particulars.'
Towards the end of their judgment. Their Lordships of the Division Bench concluded that in the circumstances of that case, the Revenue had been able to discharge the onus of proof by confronting the assessee with his own admissions which he had made by filling his revised returns.
9. The circumstances of the instant case are entirely different. Herein, even though the department be deemed to have discharged the original onus by confronting the assessee with the statement contained in its revised return, yet at best it can be said that thus onus, thereafter, shifted to the assessee and the Tribunal had to see whether the assessee had been able to discharge that onus or not. As noticed earlier, the Tribunal accepted the explanation given by the assessee by observing that since the Karta of the HUF was seriously sick and the assessee surrendered the additional amounts in order not to get itself involved in litigation with the Revenue. In other words, the Tribunal, while being alive to all the relevant circumstances came to a firm conclusion that it was not a case of deliberate concealment of income. In Gumani Ram Siri Ram v. CIT, Punjab , Division Bench of this Court observed that there can be a hundred reasons in an agreement, but for levying the penalty the principles laid down by Their Lordships of the Supreme Court in CIT v. Anwar Ali : 76ITR696(SC) had to be kept in view. In that case, it was laid down that penalty proceedings were quasi-criminal in nature and burden lay on the Revenue to prove all the necessary links in the chain of the default of the assessee before it can be burdened with penalty. We have already noticed that apart from the subsequent returns filed by the assessee, the Revenue did not produce any evidence to show that these two figures represented the concealed income of the assessee. When a Tribunal recods a finding of fact after taking into consideration all the relevant circumstances, no question of law can be said to arise out of its decision.
10. For reasons aforementioned, we are of the view that the Tribunal was justified in declining to state the case and to refer any question of law to us. There is no merit in this petition which is hereby dismissed.
B. S. Dhillon, J. - I agree.