COMMISSIONER OF INCOME TAX Vs. NAWAB

JUDGEMENT

(1.) THE assessee returned an income of Rs. 17,648 for the assessment year 1964-65 and an income of Rs. 25,663 for the assessment year 1965-66. THE Income-tax Officer rejected the account books of the assessee on the ground that it was not maintaining the daily stock books. He applied a gross profit rate of 15 per cent. and assessed an income of Rs. 53,425. As the income returned by the assessee was less than 80 per cent, of the income assessed, the Income-tax Officer referred the matter to the Inspecting Assistant Commissioner for taking action for imposing penalty.

(2.) THE Inspecting Assistant Commissioner held that the assessee was guilty of concealing the particulars of his income or furnishing inaccurate particulars thereof within the meaning of Clause (c) of Sub-section (1) of Section 271 of the Income-tax Act, 1961. Ultimately, he proposed a penalty of Rs. 7,500 and Rs. 8,000, respectively.

(3.) THE Explanation to Section 271(1)(c) raises a presumption that the assessee had concealed his income or furnished inaccurate particulars, if the returned income is less than 80 per cent. of the assessed income. THE Explanation requires the assessee to establish that the concealment or furnishing of inaccurate particulars was not because of any fraud or wilful neglect on his part.