STEEL INGOTS LTD Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THIS is an appeal filed by the assessee under Section 260A of the Income -tax Act, 1961, against an order dated May 24, 2002, passed by the Income -tax Appellate Tribunal, Indore Bench, Indore, in I.T.A. No. 42/Ind/96 and 192/Ind/96. The appeal was admitted for final hearing of the following substantial questions of law: (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in confirming the imposition of penalty under Section 271(1)(c) of the Income -tax Act, 1961, particularly when the legality of application of Section 68 for making addition in question itself was doubtful? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of Explanation to Section 271(1)(c) were attracted even in absence of proper finding on the conditions of Explanation (B) to Section 271(1)(c) of the Income -tax Act?

(2.) HEARD Shri P.M. Choudhary, learned Counsel for the appellant and Shri R.L. Jain, learned senior Counsel with Ku. V. Mandlik for the respondent.

(3.) AT the outset we may consider it proper to quote as to how the Tribunal dealt with this issue while upholding the impugned penalty on the assessee under Section 271(1)(c) ibid. We have carefully considered the arguments advanced by the parties in view of the materials available on record and have also gone through the orders impugned as well as judgments cited by learned authorised representative and relied on by the lower authorities. The orders impugned are comprehensive and reasoned ones. As it appears from the record that the assessee was not able to establish the identity of the kabaddies and therefore, the Assessing Officer had held that the appellant was not able to substantiate the explanation given by it for credits appearing in the name of kabaddies and consequently levy of penalty by virtue of Explanation to Section 271(1)(c) of the Act was levied and upheld by the learned Commissioner of Income -tax (Appeals). The assessing authority has rightly observed that under the present law the onus lies on the assessee and not on the Department to prove that certain amounts credited in its books were genuine and not bogus and also that the assessee was not only to give necessary explanation but to substantiate the same. The lower authorities have relied on the decisions in the cases of B -tex Corporation v. ITO [1993] 202 ITR 17 Polycon Spun Pipes v. ACIT 53 ITD 546 and CIT v. Shama Magazine : [1995]213ITR64(Delhi) . We thus do not find any infirmity in the orders levying aforesaid disputed penalties against the assessee by the lower authorities.