COMMISSIONER OF INCOME TAX Vs. C. ANANTHAN CHETTIAR

JUDGEMENT

(1.) THE question referred for our consideration, at the instance of the Revenue is : 'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no penalty should be levied with reference to concealed income seized in the form of jewellery and cash following the ratio of the Supreme Court in the case of Sir Shadilal Sugar & General Mills Ltd. v. CIT : [1987]168ITR705(SC) , even after amendment to Section 271 in 1964 and in 1975?' The assessment year is 1986 -87.

(2.) THERE was a search in the assessee's shop and residence on 22nd Nov., 1985 at which time cash, jewellery and certain documents were seized. Thereafter, a revised return was filed by the assessee for this assessment year, which return was accepted -and assessment made on the basis of that return.

(3.) LEARNED counsel for the Revenue submitted that the order of the Tribunal is not in accordance with law, as it has ignored the Explanation to Section 271(1)(c) of the Act. Learned counsel also placed reliance on the decision in the case of K.P. Madhusudhanan v. CIT : [2001]251ITR99(SC) , wherein it was held that the law declared by the Court in the case of Sir Shadilal Sugar and General Mills Ltd. v. CIT, (supra) was no longer applicable by reason of the addition of the Explanation to Section 271. That Explanation casts a burden on the assessee to show that the additional income that had not been disclosed was not due to fraud or neglect.