COMMISSIONER OF INCOME TAX Vs. S I PARIPUSHPAM

JUDGEMENT

(1.) THE Tribunal held that levy of penally under Section 271(1)(c) of the Income-tax Act, 1961, was wholly unwarranted as there had been no fraud and wilful neglect anil the assessce had, only with a view to co-operate with the Department, agreed to the addition of the sum of Rs. 24,000 in the assessment of his income for the assessment year 1974-75. THE assessing authorities had no material, apart from the fact that the assessee had agreed to the addition of that sum to his income for the purpose of assessment, to hold that there had been any wilful neglect on the part of the assessee in not having included such sum in his income earlier.

(2.) THE Supreme Court in the case of Sir Shadilal Sugar and General Mills Ltd. v. CIT [1987] 168 ITR 705 pointed out that every addition to the income of the assessee does not warrant such addition being treated as concealment of income. To quote the words of the judgment (page 713) : "THEre may be a hundred and one reasons for such admission, i.e., when the assessee realises the true position, it does not dispute certain disallowances, but that does not absolve the Revenue from proving the mens rea of a quasi-criminal offence". This court in the case of CJT v. Inden Bislers [1999] 240 ITR 943 held that a finding of fraud is a serious matter in any context against any person and should not be lightly recorded in the absence of proper evidence in support of that finding. THE court further observed that the fact that the Explanation to Section 271(1)(c) of the Act required the assessee to show that there was no fraud or wilful neglect does not any way enable the Revenue to contend that there is a presumption of fraud or neglect without adducing any evidence, whatever to substantiate such assertion.