Additional Commissioner of Income Tax Vs Mohd. Shafi Mohd. Nabi

B.P. Jeevan Reddy, C.J.@mdashu/s 256(2) of the income tax Act, 1961, the Income Tax Appellate Tribunal, Allahabad Bench, has stated the following questions :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal''s decision is not vitiated in law and whether there was material before the Tribunal for holding that the burden of proving absence of fraud or gross or willful neglect in filing the return of income has been discharged by the assessee within the meaning of the Explanation to Section 271(1)(c) of the Income Tax Act, 1961 ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in cancelling the penalty of Rs. 9,000 imposed by the Inspecting Assistant Commissioner under the Explanation to Section 271(1)(c) of the Income Tax Act, 1961 ?"

2. The assessee is an individual. He is a commission agent in vegetables. For the assessment year 1968-69, he filed a return disclosing an income of Rs. 6,100. The assessment was, however, completed on an income of Rs. 15,100. Inasmuch as the returned income was less than 80% of the assessed income, penalty proceedings were taken against the assessee u/s 271(1)(c) read with the Explanation then in force. Since the penalty imposable exceeded Rs. 1,000, the matter was sent to the Inspecting Assistant Commissioner. The Inspecting Assistant Commissioner imposed a penalty of Rs. 9,000. He gave three grounds'' for imposing the said penalty. On appeal, the Tribunal dealt with each of the three grounds given by the Inspecting Assistant Commissioner arid negatived the same. Accordingly, it allowed the appeal.

3. So far as the position obtaining u/s 271(1)(c) read with the Explanation then in force is concerned there can be no quarrel. It is authoritatively set out by the Supreme/Court in Commissioner of Income Tax Vs. Mussadilal Ram Bharose, . On a perusal of the judgment of the Tribunal, however, we are satisfied that the approach adopted by it is in no way contrary to the principle of the said judgment. As a matter of fact, the Tribunal did not go by the rule of burden of proof at all. It dealt with the grounds given by the Inspecting Assistant Commissioner for imposing the penalty separately and specifically and negatived each of them.

4. We do not think that there is any error in the approach of the Tribunal. Accordingly, question No. 1 is answered in the negative, that is, in favour of the assessee and against the Revenue. For the same reasons, question No. 2 is answered in the affirmative, that is, in favour of the asses-see and against the Revenue.

5. No costs.