GORDHANDAS RAMDAS v. INCOME TAX OFFICER
[Citation -1984-LL-0910-3]

Citation 1984-LL-0910-3
Appellant Name GORDHANDAS RAMDAS
Respondent Name INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 10/09/1984
Assessment Year 1974-75
Judgment View Judgment
Keyword Tags imposition of penalty • criminal proceedings • concealed income • burden of proof • initial burden • onus to prove • cash credit • low yield
Bot Summary: The ITO had levied a penalty of Rs. 23,000 on the ground that the assessee concealed his income by showing low yield of groundnut oil and by making some cash credits in the name of others in the sum off Rs. 15,000 in its accounts. On appeal, the AAC reduced the penalty to Rs. 10,000 as in respect of the addition made on account of low yield the assessee could not be said to have concealed the particulars of income. Counsel for the assessee contended that the assessee had produced the creditor and though the burden of proof that lies on the assessee in the assessment proceedings may not have been discharged, the burden that lies on an assessee in quasi criminal proceedings like the present one for imposition of penalty had been sufficiently discharged. In the case before us, the Department has not collected any evidence or circumstances to prove that the cash credit represented the concealed income of the assessee. Departmental representative took recourse to the Explanation to s.271(1)(c)which provided that where the assessed income exceeds the declared income by 20 per cent or more, the burden shall be on the assessee. In the absence of any further material to show that the amount of the cash credit represented the concealed income of the assessee, there was no justification for the levy of the penalty. The appeal is allowed and the penalty levied on the assessee is cancelled.


This is assessee's appeal against levy of penalty under s. 271(1)(c). ITO had levied penalty of Rs. 23,000 on ground that assessee concealed his income by showing low yield of groundnut oil and by making some cash credits in name of others in sum off Rs. 15,000 in its accounts. On appeal, AAC reduced penalty to Rs. 10,000 as in respect of addition made on account of low yield assessee could not be said to have concealed particulars of income. Feeling aggrieved, assessee has come to this Tribunal. We have heard ld. counsel for assessee and ld. departmental representative. genuineness of credits was accepted by AAC but on second appeal by Revenue, action of ITO in treating those credits s genuine was upheld by Tribunal and addition on that account was restored. ld. AAC has observed that Tribunal has held that explanation offered by assessee was palpably false. We do not find any such observation in order of Tribunal. What ld. Members observed in their order dt. 8th Feb., 1982 is that assessee had failed to establish that creditors had resources to make deposits. Thus, credits were treated as non-genuine because credit worthiness of creditors was not established. ld. Counsel for assessee contended that assessee had produced creditor and though burden of proof that lies on assessee in assessment proceedings may not have been discharged, burden that lies on assessee in quasi criminal proceedings like present one for imposition of penalty had been sufficiently discharged. He relied upon ruling of Patna High Court in CIT vs. Nipani Tobacco Stores(1984) 40 CTR (Pat)1:(1984)145 ITR 128 (Pat)in which, in identical circumstances, it was held that initial onus to prove negative fact can be said to have been discharged by assessee by examining creditor and it was then for Department to prove that cash credit, in fact, represented concealed income of assessee. In case before us, Department has not collected any evidence or circumstances to prove that cash credit, in fact, represented concealed income of assessee. ld. departmental representative took recourse to Explanation to s.271(1)(c)which provided that where assessed income exceeds declared income by 20 per cent or more, burden shall be on assessee. As observed in case of CIT vs. Nipani Tobacco Stores(supra), initial burden laid by Explanation stood discharged as assessee had examined creditor. Therefore, in absence of any further material to show that amount of cash credit represented concealed income of assessee, there was no justification for levy of penalty. This appeal, therefore, in our view deserves to be allowed. appeal is allowed and penalty levied on assessee is cancelled. *** GORDHANDAS RAMDAS v. INCOME TAX OFFICER
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