Sabyasachi Mukharji, J. - In this application under Art. 226 of the Constitution the petitioner is challenging an order dated 14th of September, 1973 passed under section 262 of the Income Tax Act, 1961 by the Additional Commissioner of Income Tax, West, Bengal I. It appears that for the relevant assessment year namely, assessment year 1965-66 the petitioner had returned income for Rs. 6,581/-. The Income Tax Officer assessed the income at Rs. 2,15,719/-. In appeal the Appellate Assistant Commissioner reduced the Income by Rs. 1,24,963/-. In second appeal the Income Tax Appellate Tribunal reduced the income by Rs. 41,610/- and as a result the reduced Income was 49,146/-. The difference of Rs. 42,000/- between the returned income and the assessed income was based on the following :
1) Rs. 20,102/- trading account.
2) Rs. 437/- being alleged expenses incurred by the assessee,
3) being cash credit brought into the accounts introduced in the accounts of the assessee Rs. 22,026/-.
2. Proceedings were taken against the assessee under section 271(1)(c) for concealment of income. The Inspecting Commissioner imposed a penalty of Rs. 6,230/-. Against the order of penalty the petitioner did not prefer any appeal but made an application before the Commissioner of Income Tax for revision. The Commissioner by his order dated 14th of September, 1973 dismissed this revision application. The said order is under challenge in this application under Article 226 of the Constitution. The Commissioner was of the view that was a cash credit of Rs. 3,026/- which was introduced to inflate the cash balance and which was admitted, according to the Commissioner, to be the income from business before the Tribunal. According to the Commissioner, the Tribunal also found a sum of Rs. 200/- had been inflated in the account of Raj Brothers, Rs. 3,000/- in the cash book which was not ledgerised and the party had denied any such transaction and the assessee claimed it to be business profit. The Commissioner has also referred the Tribunals order that the cash credit of Rs. 10,000/- which, according to the creditor, was merely a book entry at the request of the assessee. The Tribunal also found that there was no evidence relating to cash credit of Rs. 5,800/.-
3. By the explanation to sec. 271(1)(c) where the total income returned by any person is less than 80 per cent of the total income as assessed under section 143 or under section 144 or under section 147 (reduced by the expenditure incurred bonafide by him for the purposes of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purpose of clause (c) of this sub-section (1).
4. The explanation, therefore, creats a rebutable presumption and the assessee, unless he rebutes the presumption of evidence, is deemed to have concealed the income, Evidence required to be adduced by the assessee to show that the concealment of income or furnishing of the inaccurate particulars were not due to fraud or to any wilful neglect. The explanation therefore, places the burden of proving that the failure to return the correct income did not arise from any fraud or gross or wilful neglect upon the assessee. The explanation creates a presumption only where the total income returned was less than 80% of the assessed income. The presumption can, however, he displaced by the assessee by proving that the failure to return the correct income did not arise from any fraud or gross or wilful negligence. The proof that would be necessary to rebut that presumption would be the preponderance of probability in the facts and circumstances of the case.
5. In the instant case the presumption arose in the facts and circumstances of the case and the burden was upon the assessee to rebut the presumption. The adducing, is, has that burden been discharged in the instant case or has the assessee by adducing evidence established by preponderance of probabilities that the failure to return the correct income was not due to wilful neglect or fraud on the part of the assessee. The Commissioner in his order has found that there was evidence that a cash credit of Rs. 3,026/-was introduced to inflate the cash balance. There is no satisfactory or no good explanation on the part hand, there was entry of Rs. 3,000/- in the cash book. The party concerned with transaction. Learned counsel for the assessee criticised the order of the Commissioner because the Commissioner had observed that the assessee ultimately claimed it to be business profit and as such admitted the falsity of the account. It is true that reading the order of the Tribunal it is apparent that the assessee as such did not admit the transaction before the Tribunal but the question is that when there was evidence that there was an alleged cash transaction with as party who had himself denied that transaction and the factum of the denial had been brought to the notice of the assessee and the assessee has not adduced any evidence satisfactory enough to be acceptable to contradict the denial of the party, in my opinion, the expression of the Commissioner that there was admission of the party does not affect the situation that the assessee had failed to establish by preponderance of probability that the failure was not due to wilful default or neglect. Furthermore, in this case it has been found that there was a cash credit of Rs. 10,000/-. This was a book entry made at the request of the assessee. This is the evidence of the alleged creditor. This evidence was also brought to the notice of the assessee and there is no sufficient evidence indicating the preponderance of the probability of the situation to contradict this finding in the assessment proceedings. If on this evidence the Commissioner has come to the conclusion that there was no such preponderance of the probabilities established by the explanation given by the assessee to rebut the presumption arising as a result of the explanation to clause (c) of section 271, in my opinion, such a finding of the Commissioner cannot be called either a perverse finding or a finding bases on no material at all. If that is the position, then the order of the Commissioner passed on such a finding cannot, in my opinion, be interfered with in an application under Article 226 of the Constitution.
6. Reliance was placed before me on several authorities, namely, -
1971 Taxation law reports, volume I, page 1909 (Commissioner of Income Tax vs. M/s. Shankrasons and Co., Trivandrum)
85 I.T.R. 627 (Commissioner of Income Tax vs. Shankarsons and company).
99 I.T.R. 514 (Commissioner of Income Tax, Gujarat-III vs. Gujarat Textile Co. (P) Ltd.)
100 I.T.R. 464 (Commissioner of Income tax, Assam, Nagaland, Manipur and Tripura vs. Chhaganlal Shankarlal)
97 I.T.R. 440 (Commissioner of Income Tax, Gujarat I vs. S. P. Bhatt)
100 I.T.R. 524 (D. V. Patel & Co. vs. Commissioner of Income Tax, Gujarat III)1975 Taxation Law reports page 120 : 1975 CTR (Raj.) 15 (Additional Commissioner of Income Tax, Rajasthan Jaipur vs. M/s. Gem Palace, Jaipur).
1975 Taxation Law Reports, page 519 (The Commissioner of Income Tax, Delhi vs. M/s. Narang & Company).
1975 Taxation Law Reports, page 851 : 1975 CTR (All) 121 (Additional Commissioner of Income tax, Lucknow, vs. M/s. Malla Ram Karam Chand).
7. These cases dealt with the facts and circumstances of particular case where, in three particular cases, the explanation given by the assessee or the evidence adduced by the assessee by preponderance or probability to establish that the assessee was not guilty were examined by the courts in the courts in the facts and circumstances of each case. Having regard to the view I have taken in the facts and circumstances of the case and the commissioners finding it is not necessary for me to discuss in details the facts of these cases. It is true that the assessee as such did not make any admission referred to by the Commissioner. But there were other materials and there have all been dealt with by the Commissioner. The Commissioner had discussed the evidence and has come to the conclusion which cannot be described as perverse.
8. In this view of the matter this application fails and is dismissed. The Rule is discharged, Interim order, if any, is vacated. There will be no order for costs.