COMMISSIONER OF INCOME TAX Vs. PARMANAND ADVANI

JUDGEMENT

(1.) THE Patna Bench of the Income-tax Appellate Tribunal has referred the undermentioned question under Section 256(1) of the I.T. Act, 1961 (hereinafter referred to as " the Act "), for the opinion of this court:

(2.) THE assessee is a registered firm. For the assessment year 1963-64, a penalty of Rs. 22,600 was imposed on it by the IAC acting under Section 274(2) of the Act on the ground that it had concealed the particulars of its income for the said assessment year to the tune of Rs. 50,000. This amount had been added to the assessee's income in a reassessment proceeding, under Section 147(b) of the Act.

(3.) THE short argument made on behalf of the department is that the Tribunal, while deleting the penalty, had lost sight of the Explanation to Section 271(1) of the Act which had been introduced into the Act by the Finance Act, 1964, and took effect from the 1st of April, 1964. By this Explanation, it was submitted, where the total income returned fell short of 80% of the income assessed, the onus lay upon the assessee to prove that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on its part.