COMMISSIONER OF INCOME TAX Vs. RATANLAL MISHRILAL

JUDGEMENT

(1.) THE following questions have been referred for our decision under Section 256( 1) of the I.T. Act, 1961.

(2.) IF the answer to the first question be in the negative, whether the Tribunal was justified in holding that amended provisions of Section 271 (1)(c) with effect from April 1, 1968, about the quantum of penalty will not be applicable for the assessment year 1964-65, though the assessee had filed a revised return of income dated 14th August, 1968, after the introduction of that amendment ? "

(3.) THE assessee came up in appeal against the imposition of penalty and the Tribunal has set aside the penalty. THE Tribunal has taken the view that the addition of income in respect of the cash credits in the assessee's account is because the explanation of the assessee had not been accepted. THEre was no other material before the Department to hold that it was the assessee's income and, therefore, in the circumstances of the case, the law laid down by the Supreme Court in Anwar Ali's case [1970] 76 ITR 696, and in the case of Khoday Eswarsa and Sons [1972] 83 ITR 369 (SC) applied. It was incumbent on the Department to establish that the income sought to be enhanced constituted income of the assessee and it was such income as was of the revenue nature. In the absence of such evidence the assessee could not be held guilty of failure to return the correct income as required by the Explanation to Section 271(1)(c) of the I.T. Act, 1961. THE Tribunal was further of the opinion that the amended provision of Section 271(1)(c) with effect from April 1, 1968, did not apply retrospectively to prior assessment years. THE penalty imposed was, therefore, deleted and the assessee's appeal allowed.