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Commissioner of Income-tax Vs. Reliable Trading Agency - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberIncome-tax Reference No. 473 of 1974
Judge
Reported in[1982]138ITR505(Cal)
ActsIncome Tax Act, 1961 - Sections 143, 144, 147, 271(1) and 271(4A)
AppellantCommissioner of Income-tax
RespondentReliable Trading Agency
Appellant AdvocateA.C. Moitra and ;A.S. Bhattacharji, Advs.
Respondent AdvocateS.N. Ganguly and ;Archana Roy, Advs.
Excerpt:
- sabyasachi mukharji, j.1. in this reference under section 256(1) of the i.t. act, 1961, the following question has been referred to this court: 'whether, on the facts and in the circumstances of the case and on a correct interpretation of sections 271(4a) and 271(1)(c) of the i.t. act,1961, read with the explanation thereto, the appellate tribunal was justified in cancelling the penalty.'2. the question relates to the assessment year 1964-65. it is not disputed,that the case would be governed by the explanation to section 271(1) of the i.t.act, 1961, which was introduced with effect from the 1st april, 1964. thecase would also be governed by the deletion of the expression 'deliberately' before the expression 'furnished inaccurate particulars' in clause (c)of section 271(1) of the act. in.....
Judgment:

Sabyasachi Mukharji, J.

1. In this reference under Section 256(1) of the I.T. Act, 1961, the following question has been referred to this court:

'Whether, on the facts and in the circumstances of the case and on a correct interpretation of Sections 271(4A) and 271(1)(c) of the I.T. Act,1961, read with the Explanation thereto, the Appellate Tribunal was justified in cancelling the penalty.'

2. The question relates to the assessment year 1964-65. It is not disputed,that the case would be governed by the Explanation to Section 271(1) of the I.T.Act, 1961, which was introduced with effect from the 1st April, 1964. Thecase would also be governed by the deletion of the expression 'deliberately' before the expression 'furnished inaccurate particulars' in Clause (c)of Section 271(1) of the Act. In the course of proceedings for the relevant assessment year it is stated that the ITO noticed a number of cash depositaccounts. Some of those cash deposit accounts were said to be on account ofloans taken on hundis in respect of which a disclosure petition was filedbefore the Commissioner. There were, however, a number of other cashdeposits also. The ITO added to the total income disclosed by the assesseeRs. 42,500 on account of peak of the loan accounts which were covered bythe disclosure petition filed before the Commissioner. Besides, he madeadditions totalling Rs. 35,700 on account of cash deposits, regarding thenature and source of which no satisfactory explanation had been given. Itmay not be inappropriate to set out the relevant portion of the order of theITO, which reads as follows :

'Other sources.--There are several credits in the names of bogus parties and also credits in the names of partners which have been disclosed by the assessee under Section 271(4A). Pending settlement of the disclosure petition these disclosed income (sic).

Rs.The credits on the basis of peak comes to42,500Further credits in the partners a/c.4,000 46,500

Other loans.--There are a few other credits in the name of different parties in respect of which no satisfactory evidence have been produced by the assessee apart from mere confirmation from these parties. It may be mentioned here that these parties are not assessed to tax, and the alleged loans in the names of these parties were received by the assessee in cash. In view of the above those amounts are treated as the assessee's income from undisclosed sources and taxed accordingly :--

Rs.1.Amtullabu Golimattesjai Lokhandwalla -- mother of Tayob M. Patheria-- stated that the amountof Rs. 10,000 advanced to the assessse was obtained by the lady from her latehusband. No documentary or satisfactory evidence is available

10,0002.Mrs. Zakiya Hussainibhoy Zalliwalla is sister-in-law of the said T. M. Patheriawho has given confirmation letter on her behalf. In this case also noevidence is produced

8,0003.Mr. Yatuyabhoi M. Patheria -- brother of the said T. M. Patheria -- No evidenceis given in support of the contention.

7,0004.Sabir Hossain -- a sum of Rs. 4,000 appears in this name. The party is a teacher ina Madrasa at Calcutta. Apart from his confirmation no evidence is produced toshow the sources in his hand-hundi (hence ?) disallowed4,0005.Nargisbai Asgarbhoy, Bombay-- No evidence is produced1,0006.Mr. Gate Z. Vasi -- No evidence is produced1,700

3. In course of these assessment proceedings the ITO also initiated action for the imposition of penalty under Section 271(1)(c) of the I.T. Act, 1961, and since the minimum penalty imposable exceeded Rs. 1,000 he referred the penalty proceedings to the IAC. The IAC held that the assessee had itself accepted that some of the loans covered by the disclosure petition represented the assessee's income; even in respect of other loan accounts no evidence was produced and the treatment of these amounts as the assessee's income was justified and interest on these loans was a false claim of deduction. He was further of the opinion that, besides, the total income shown in the return, i.e., Rs. 48,648,was much less than 80% of the assessee's total income of Rs. 1,44,724 and the Explanation to Section 271(1)(c) was applicable. He, therefore, imposed a penalty of Rs. 40,000 under Section 271(1)(c). In response to the notice issued by the IAC no one appeared before him but a letter was written. In the letter it was stated that the ITO had not taken the trouble of issuing summons to the various hundi lenders but merely added the same on the basis of disclosure made to the Commissioner. There was no evidence to show that any summons was issued to the alleged hundi lenders. Therefore, this statement must be accepted to be correct. According to the explanation given by the assessee before the IAC the assessee had made the disclosure on the understanding that there would be no penalty. He made the disclosure, the assessee stated, because of difficulties in producing the creditors who had taken advantage of the peculiar situation created by the surrender of a number of hundi bankers to the Commissioner. It was argued that no penalty proceeding was justified in those circumstances. The IAC, however, did not see any merit in this contention in view of the disclosure petition; he, therefore, imposed the penalty as indicated before. In this connection it would be appropriate, in our opinion, to refer to a copy of the disclosure petition upon which reliance was placed. In the disclosure petition under Section 271(4A) it was stated as follows :

'1. That assessment for the year 1960-61 had been duly completed. In that year certain cash credits appear in the books of account in the names of four persons which amounted to Rs. 27,000. The peak amount was, of course, less than the above amount. A list of the persons from whom the amounts were taken as loan against execution of hundis had been submitted before the Income-tax Officer and these persons had been examined and'all evidence had been gone through and the loans were accepted as genuine by the learned Income-tax Officer.

2. That in the following assessment years, i.e., 1961-62, and the subsequent years, there were additional loans in the names of different hundiwallas. A list was duly submitted before the Income-tax Officer. These persons were called but strangely enough none of them cared to appear. They are now absolutely non-co-operative.

3. That failing to receive any co-operation from the creditors, I had approached the learned Income-tax Officer for his guidance, who pleaded his inability to help us in this matter in the absence of any acceptable evidence specially books of accounts of the creditors.

4. We have now decided that your Honour should be approached under Section 271(4A).

5. That the list of all hundi loans has been prepared to show the excess amount in each year over that of the earlier year so that the same may be included in our total income.

Prayer.--The hundi loans as per statements attached hereto, which are now declared income of the firm and offered for taxation, may kindly be directed to be included in the total income of the respective years and we may be exempted from imposition of any penalty.'

4. Therefore, it appears that the disclosure petition was made in peculiar circumstances. These alleged hundiwalla persons were called but none of them cared to appear. They were now absolutely non-co-operative and, failing to receive any co-operation from the alleged creditors, the assessee had approached the ITO, who pleaded his inability to help, and in those circumstances in the expectation that penalty would not be levied the assessee merely 'agreed that the same might be added in the total income.'

5. As we have noticed, in the order of the ITO, the disclosure petition was pending adjudication. Quite apart from that, there were further credits and as no evidence had been produced in support of these credits, these were added.

6. From the imposition of penalty an appeal was preferred before the Income-tax Appellate Tribunal and the Income-tax Appellate Tribunal referred to the relevant contentions and to the principles enunciated bythe Supreme Court in the case of CIT v. Anwar Ali : [1970]76ITR696(SC) , and observed in its order as follows:

'Having considered the submissions, in our opinion, the contention of the appellant is entitled to be accepted. The addition in respect of hundi loans was made merely on the basis that a petition under Section 271(4A) had been filed and it was pending. That petition, however, was rejected. The averments in that petition are clear that as the creditors were not willing to come forward to give evidence, it was in a fix and, therefore, the peak of the amounts was being offered for taxation so that penalty may be exempted. It had been pointed out therein that such credits had been accepted in 1960-61 and some of the parties were common in the subsequent years. It is seen that in regard to the other credits confirmation from the parties was available but merely on the ground that the evidence in regard to their resources was not sufficient, the addition came to be made. The difference between the income as returned and that determined has arisen due to the circumstance that the credits which were represented to be loans came to be added as income and interest payments came to be disallowed. There is absolutely no material placed by the department to show that the credits represented receipts of a revenue nature. On the facts and circumstances, there is no ground to conclude that the failure to return the income as determined was due to any fraud or gross or wilful negligence of the assessee. An imposition of penalty, in the circumstances of the case, is not tenable. It is accordingly cancelled.'

7. The Tribunal thus allowed the assessee's appeal. It appears, therefore, that the fact is : (1) that the addition was made mainly and primarily on the basis that the petition under Section 271(4A) had been filed and it was pending. That petition was, however, not rejected ; (2) The Tribunal was of the view that the petition was clear that as the creditors were not willing to come forward to give evidence, the assessee was in a fix and, therefore, the peak of the amounts had been offered for taxation so that penalty might be exempted; (3) it was also noted that such credits had been accepted in 1960-61 and some of the parties were common in the subsequent years ; it was seen that in regard to the other credits confirmation from the parties was available but merely on the ground that the evidence in regard to their resources was not sufficient, the addition had been made ; (5) The difference between the income as returned and that determined had arisen due to the circumstance that credits which were represented to be loans came to be added as income and interest payments came to be disallowed ; and (6) there was no material placed by the department to show that the credits represented receipts of a revenue nature.

8. In those circumstances, the Tribunal was of the view that there was no ground to conclude that the failure to return the income as determined was due to any fraud or gross or wilful negligence of the assessee. In the circumstances, the Tribunal deleted the imposition of the penalty.

9. Now, as we have mentioned before, the principles normally applicable in the case of imposition of penalty have been enunciated by the Supreme Court in the decision in the case of CIT v. Anwar Ali : [1970]76ITR696(SC) . But that was a decision rendered in the background of the expressions used in Section 28(1)(c) of the Indian I.T. Act, 1922. Thereafter, the I.T. Act, 1961, was originally introduced which did not make much material difference. But with effect from 1st April, 1964, an Explanation to Section 271(1)(c) had been introduced to the effect that where the difference between the assessed income and the income disclosed is more than 80%, as is in the instant case, then the onus was on the assessee to prove that the failure to return the correct income or to furnish the particulars of the income was not due to the gross or wilful default on the part of the assessee. Therefore, keeping these legal principles in mind, the facts in this case will have to be decided. Numerous decisions were cited from the bar in aid of the respective contentions. But most of them, in our opinion, are not relevant to be discussed in detail, because these depended on the peculiar facts of those cases. We have to bear in mind the warning of the very high authority that it is dangerous to try to match the colour of one case with the decisions in other cases. It is difficult sometimes to evolve the correct principles. In any case, as the decisions had been cited, we will, however, have to refer to them.

10. Our attention was drawn to a Bench decision in the case of CIT v. P. B. Shah & Co. (Pvt.) Ltd. : [1978]113ITR587(Cal) and to a decision of the Delhi High Court in the case of Durga Timber Works v. CIT : [1971]79ITR63(Delhi) . In both these cases, there was unequivocal acceptance either in the assessment proceedings or in the disclosure petition that the sums added to the income by the assessee of the year in question was without any reservation. Our attention was also drawn to the decision of the Punjab and Haryana High Court in the case of Mahavir Metal Works v. CIT , where a revised return was filed admitting the sum included to be the 'income of the assessee in the year in question', to a decision of the Bombay High Court in the case of Western Automobiles (India) v. CIT : [1978]112ITR1048(Bom) . In both these cases there was unequivocal admission of the amount added by the assessee in the year in question without reservation of the Revenue in agreeing to which the income had been included. Our attention was also drawn to a decision of the Kerala High Court in the case of India Sea Foods v. CIT : [1978]114ITR124(Ker) , where there was not only an admission of the income but also an admission that the penalty could be imposed on the said amount in the petition filed very much unlike the facts of the instant case before us. Ourattention was also drawn to the decision of the Madras High Court in the case of CIT v. Krishna & Co. : [1979]120ITR144(Mad) , where the assessee admitted that the amount represented his own income and to a decision of the Rajasthan High Court in the case of CIT v. Dr. R. C. Gupta and Co. , where also the assessee had admitted that a certain amount represented 'his income'. Our attention was also drawn to a decision of the Division Bench of the Calcutta High Court in the case of CIT v. W. J. Walker and Co. : [1979]117ITR690(Cal) , where the Division Bench considered the effect of the introduction of the Explanation and how far the applicability of the said Explanation could be adjusted with the principles enunciated by the decision of the Supreme Court in the case of Anwar Ali : [1970]76ITR696(SC) . But as the Tribunal had not correctly referred to the facts and as the Tribunal had not in that case considered this aspect, the case was remanded to the Tribunal for its decision. Reliance was also placed on a decision of the Madras High Court in the case of CIT v. Prabhat Bakery : [1979]118ITR35(Mad) , where the Tribunal did not consider whether fraud, gross or wilful neglect was established by drawing the correct principle and that case was remanded to the Tribunal for its decision on merits.

11. Learned Advocate for the assessee drew our attention to a decision of the Supreme Court in the case of CIT v. Anwar Ali : [1970]76ITR696(SC) and to the decision of the Kerala High Court in the case of CIT v. Mohammed Kunhi : [1973]87ITR189(Ker) , which unfortunately is a decision before the introduction of the Explanation. Our attention was also drawn to a decision of the Supreme Court in the case of CIT v. Khoday Eswarsa and Sons : [1972]83ITR369(SC) , which dealt with Section 28(1)(c) of the Indian I.T. Act, 1922, without the help of the Explanation to Section 271(1)(c) of the I.T. Act, 1961. Similarly, the learned advocate for the assessee drew our attention to the decision of the Punjab and Haryana High Court in the case of Gumani Ram Siri Ram v. CIT , which merely reiterated the principles of the decision of the Supreme Court in Anwar Ali's case without, however, if we may point out respectfully, taking into consideration the consequences of the introduction of the Explanation with effect from 1st April, 1964, though the assessment year concerned was subsequent to the said year, being the assessment year 1964-65. Reliance was placed on the decision of the Allahabad High Court in the case of CIT v. Banarsi Shah Charan Singh : [1972]86ITR494(All) , which, however, was a decision concerned with Section 28(1)(c) of the Indian I.T. Act, 1922, without the help of anything like the Explanation to Section 271(1)(c) of the I.T. Act, 1961. Reliance was also placed on the decision of the Allahabad High Court in the case of CIT v. Jhagru Ram Kunda Nand : [1972]86ITR823(All) , which again was a decision rendered in the background of Section 28(1)(c)of the Indian I.T. Act, 1922. Our attention was drawn to another decision of the Madhya Pradesh High Court in the case of CIT v. Vrajlal Manilal and Co. : [1972]86ITR799(MP) , which, however, was a decision under Section 271(1)(c) of the I.T. Act, 1961, but as the decision was in respect of the assessment year 1960-61 it was treated on the same principle as Section 28(1)(c) of the Indian I.T. Act, 1922. It is not necessary, in the circumstances of this case, in our opinion, to deal with these decisions in any greater detail. As mentioned hereinbefore, they depended on the peculiar facts and circumstances of the cases.

12. We may, however, point out that the Gujarat High Court in the case of CIT v. Drapco Electric Corporation : [1980]122ITR341(Guj) , dealt with the effect of the introduction of the Explanation to Section 271(1)(c) of the I.T. Act, 1961, with effect from 1st April, 1964, and what would be the effect on principles enunciated by the Supreme Court in the case of Anwar Ali : [1970]76ITR696(SC) . There, the Gujarat High Court observed as follows (p. 342):

'The Explanation to Section 271(1)(c) consists of two parts. The first part sets out the facts which, if proved, give rise to a rebuttable presumption. It provides that, in order to raise the presumption, the case must be one where the total income returned by any person is less than eighty per cent. of the total 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). If these facts are shown to exist, a presumption would be raised that such person has concealed the particulars of his income or furnished inaccurate particulars of such income. This presumption would, of course, be a rebuttable presumption and it would be open to such person to establish that despite there being a difference of more than twenty per cent, between the income returned and the income assessed (such diierence having been arrived at in the manner indicated in the first part of the Explanation], the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. It is only if he fails to discharge the burden of displacing the presumption in the manner aforesaid on the basis of preponderance of probabilities by leading evidence or by relying on the material which is already on record that the penalty under Section 271(1)(c) for concealment of income would be attracted.

Under Section 277, a false statement in any verification under the Act or any rule made thereunder, which the person verifying knows or believes to be false, or does not believe to be true, is made punishable. Ordinarily a person, who has to furnish a return of income under such statutoryrequirements and face such statutory consequences in case the information furnished in the return is found to be false, is expected to be, and in all probability would be, extremely careful. Except for marginal differences creeping in on account of bona fide mistakes or differences arising out of genuine doubt as to taxability, there would not be any scope for a substantial variation as between the income returned and the income assessed. The difference of more than 20% between the income returned and income assessed, which is more than one-fifth of the assessed income, cannot be said to be insubstantial. All marginal differences or differences arising out of doubtful claims or contentions would ordinarily be covered within the margin of 20%. This is all the more so, because, in terms of the Explanation, the income assessed, which has to be taken into account for the purpose of computing the difference of more than 20%, is different from the total income as assessed under the various provisions of the Act. The income assessed within the meaning of the Explanation is such total income minus the expenditure incurred bona fide by the assessee for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction. If all these considerations are borne in mind, it would appear that the fact that there is a difference of more than 20% in the income returned and income assessed, is a fact which can be generally treated as inherently relevant in proving concealment of income and it can be said to have for a rational mind, a probative or persuasive value in the matter of the proof of such concealment.

Further, one cannot lose sight of the fact that the circumstances under which and the reasons for which such difference between the returned income and the assessed income has occurred is a matter within the knowledge of the assessee himself and evidence thereof would be only in his own power to produce. It would be exceedingly difficult, if not impossible, for the department to prove facts which are specially within the knowledge of the assessee and, therefore, in the absence of any explanation from the assessee as to why such difference has occurred, the very fact of the occurrence of such difference could legitimately be considered as inherently relevant in the matter of proof of concealment of income. Merely because, for the purpose of working out the difference of more than twenty per cent. between the income returned and the income assessed, the income assessed is required to be reduced as provided in the Explanation, the ingredients of concealment within the meaning of Section 271(1)(c) are not in any manner affected. This provision, in fact, is beneficial to the assessee, because it leaves a larger margin than what would have been the effective margin, had no provision for such reduction been made. This requirement in the first part of the Explanation cannot, therefore, be held to be affecting the content or structure of the penal default prescribed inSection 271(1)(c). Concealment for the purposes of Section 271(1)(c) must be conscious concealment. The Explanation, in so far as it is relevant, provides that unless the assessee proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, he should be deemed to have concealed the particulars of his income.

Fraud would obviously be a case of conscious concealment. So also would be a case of wilful neglect because neglect of that type would result from a deliberate act on the part of the assessee resulting in escapement or avoidance of tax and conscious concealment might ordinarily be inferred in such a case. Even for the purpose of the definition of the expression 'done in good faith' as given in Section 3(22) of the General Clauses Act, any action taken by a person being aware of possible harm to others in total or reckless disregard of the consequences, can be treated as not honest.

It would thus appear that none of the factors which an assessee has to prove under the Explanation in order to get out of the clutches of Section 271(1)(c) affects the ingredients of the penal default. Penal default is conscious concealment and all that the Explanation does is to enact a rule of evidence whereunder the presumption as to conscious concealment can be rebutted by evidence led by an assessee.'

13. We had also in a recent decision in I.T. Ref. No. 320 of 1973 in the case of CIT v. Rupabani Theatres P. Ltd. (unreported)--since reported in : [1981]130ITR747(Cal) occasion to deal with this aspect. In the said decision, we have observed as follows (p. 765):

'In the light of the aforesaid decisions and in the light of the provisions that we have mentioned hereinbefore, in our opinion, it would not be correct to state that there was any significant difference by the introduction of the new Explanation with effect from 1st April, 1976, by the Taxation Laws (Amendment) Act, 1975. That Explanation merely made explicit what was implicit in the previous Explanation. Previous Explanation used the expression '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' while the present Explanation provides that 'such income should be deemed to represent the income in respect of which particulars have been concealed'. In effect, this, in our opinion, makes explicit what was implicit in the previous Explanation and in an appropriate case, in our opinion, unless certain presumptions are made, that is to say, presuming it to be an income of the assessee for that year, no question of deeming to have furnished inaccurate particulars or concealed that income would arise. The Tribunal, therefore, in our opinion, was wrong in the legal approach that after the introduction of the Explanation, no change was intended which affected the observations of the Supreme Court. Change undoubtedly was intended to be effected,not to nullify the observations of the Supreme Court because those observations were made long after the Explanation had come into effect, but to implement the legislative policy which was felt necessary to ensure implementation of these provisions. But the fundamental question is that it is also not necessary, in our opinion, to lay down any positive rule which is applicable to all cases, whether the evidence to be adduced by the asses-see should be of a positive nature or of negative nature; nor is it theoretically possible or desirable, in our opinion, to lay down any abstract proposition that the nature of the evidence to prove a negative fact would be less than the nature of the evidence to prove a positive fact. In these matters it is, in our opinion, appropriate to decide each question on the facts and circumstances of the case bearing in mind the basic principles and these are that the evidence in the assessment proceedings are not by themselves conclusive. The circumstances under which the fact that certain sums added as the income of the assessee in the assessment proceeding do not ipso facto make the same income of the assessee in the penalty proceedings but the circumstances under which such assessment has come to be made and the nature of the evidence produced in the assessment proceedings, are materials and may provide some good evidence for coming to certain conclusions.

The fact that there has been rejection of the explanation given by the assessee about the source is also not conclusive of the fact either of concealment of income which is a positive or negative act or furnishing inaccurate particulars, which is presumed by the operation of the Explanation to the section which was implied before the introduction of the Explanation and had to be proved before the introduction of the Explanation. It is not conclusive nor ipso facto proof and, hence, the nature of the circumstances are material evidence. For example, the assessee gives an explanation and adduces evidence and the nature of the evidence adduced may provide cogent material to come to the conclusion that the assessee was deliberately trying to secret the income or that the explanation given in a particular case was to conceal the income or was a deliberate attempt to furnish inaccurate particulars. The explanation presumes that certain conduct must have been done. Unless the assessee discharges that onus, the presumption would be operative, unless that presumption is rebutted by evidence. Now, the quantum of evidence, whether negative or positive or small or large, must depend upon the facts and the circumstances of each case and the nature of evidence adduced either in the assessment proceedings or after that. In this case, it appears that the assessee had given an explanation. The nature of that evidence we have set out hereinbefore. The assessee was given an opportunity to explain in the proceedings under Section 271(1)(c) of the Act, the assessee tried to give an explanation and steps taken by the assessee in that respect, that is to say, after coming on one occasion, non-appearance on another ground and seeking further dates, these are relevant factors upon which the revenue autho-rity could come to its own conclusion. In our opinion, the Tribunal, therefore, was not quite justified in saying that after the introduction of the Explanation the onus lay entirely on the Revenue. The Tribunal has considered this aspect of the position. If by applying the wrong principle the Tribunal had arrived at a conclusion, which was a possible conclusion, without considering the factual basis, we would have been justified in setting aside such a conclusion. But in this case, the Tribunal had made certain observations and we have set out those observations hereinbefore. It would appear therefrom that the Tribunal has expressed the view after taking into consideration the fact that the three cheques were paid on account of interest. What would be the effect of that observation of the Tribunal, the Tribunal has not elaborated. But the Tribunal concluded : 'Therefore, the assessee must succeed on the facts because the department had failed to prove that the amount of Rs. 26,000 and the interest thereon was assessable income of the assessee which it had failed to disclose'. The Tribunal, it appears, was basing its conclusion not only on the view it had taken on the theory of onus but also on the basis of its finding of facts. There is no question challenging this finding, which the Tribunal records as perverse. Therefore, though the Tribunal was not correct on its interpretation of law, as it had based its findings on facts also which have not been challenged, the conclusion that the department has failed to prove the concealment of the sums mentioned in question No. 1 cannot be assailed or altered. We answer question No. 1 accordingly.'

14. In the light of the aforesaid decision, we have to analyse the facts as foundry the Tribunal in this case. The Tribunal has noted that the disclosure petition had been made under peculiar circumstances, The Tribunal has accepted that explanation of the assessee which was made on their peculiar circumstances. The Tribunal has further noted that the addition was made merely on the basis of the disclosure petition under Section 271(4A) of the Act of 1961. The Tribunal has noted that there was no evidence in the assessment proceedings that there was no acceptance by the assessee, on the whole of the disclosure petition or anywhere that this amount represented a receipt of the revenue character. There was no evidence adduced by the assessee in the penalty proceedings though the ITO issued notice upon the hundiwallas. It follows therefrom that there was no evidence and the hundiwallas were not traceable. There was an averment that these name-lenders or hundiwallas or the persons in whose names the accounts were appearing were not co-operative. This explanation, if the Tribunal has accepted then from this explanation, in our opinion, it cannot be said that the Tribunal was wrong in coming to the conclusion that the assessee had discharged its onus which the assessee was called upon to discharge in the light of the principles enunciated in the several decisions. In that view of the matter we are of the opinion that the decision of the Tribunal cannot be assailed and the question must be answered in the affirmative and in favour of the assessee.

15. In the facts and circumstances of the case, the parties will pay and bear their own costs.

Sudhindra Mohan Guha, J.

16. I agree.


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