Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment years 1971-72 to 1973-74 - Whether where assessee had not maintained its account books and submitted its returns on basis of estimated income and estimates were not such as to be regarded as deliberate underestimate of income, it could not be said that estimates were result of any gross or wilful negligence so as to attract penalty under section 271(1)(c) - Held, yes FACTS The assessee was plying buses and had not maintained accounts, but submitted returns on the basis of estimated income. She was required to furnish details regarding number of days on which the vehicles plied on the route; the tax paid for each of the vehicles, etc. On the basis of the said information, the Assessing Officer estimated the income of the assessee to be an amount much higher than what was estimated by the assessee. The Assessing Officer inferred that the assessee had deliberately concealed the true income and levied a penalty under section 271(1)(c). On appeal, the Commissioner (Appeals) held that the assessee had not deli-berately concealed income on the ground that the buses were old and there had been a bona fide reduction in the assessee's income. Since the assessee had offered satisfactory explanation and thereby rebutted the presumption raised against her under the Explanation to section 271(1)(c), she could not be charged with fraud or gross or wilful neglect on her part. On the revenue's appeal, the Tribunal upheld the orders of the Commissioner (Appeals). It held that, in the absence of any specific discrepancy being detected or any specific omission being established, it could not be held that there was any gross or wilful negligence on the part of the assessee in returning the income on the basis of the estimate made by her in the earlier years. On reference : HELD The Tribunal, in the instant case, had clearly held that the estimate given by the assessee was not the result of any gross or wilful negligence and that penalty was not called for. It was clear from its order that the Tribunal was of the view that the estimates given by the assessee were not such as to be…

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