COMMISSIONER OF INCOME TAX Vs. BHARAT TUBEWELL STORES

JUDGEMENT

(1.) This is an application under Sec. 256 (2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), requiring the Tribunal to refer the following question of law for our opinion :

(2.) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that penalty was not exigible and in deleting the same ?

(3.) On facts, there is no dispute that there was concealment of part of the income within the meaning of Sec. 271(1)(c) of the Act. The Inspecting Assistant Commissioner levied the penalty and he relied on the Explanation to Sec. 271(1)(c) of the Act in the matter of onus. When the appeal was preferred to the Tribunal both against the add back of Rs. 20,000 as well as the matter of penalty, the Tribunal upheld the add back, but deleted the penalty on the ground that the revenue had to establish not by mere falsity of the explanation of the assessee or no explanation on the part of the assessee that the subject -matter of assessment is the concealed income of the assessee and that the burden lies on the revenue to establish the charge of concealment and the absence of an explanation or the falsity of an explanation cannot be construed as establishment of concealment. "However, if a reference is made to the Explanation to Sec. 271(1)(c) of the Act, which is in the following terms :