Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment Year 1963-64 - Whether where Tribunal on consideration of all circumstances concluded that cash credit was not genuine and it represented concealed income of assessee, it was finding of fact and no question of law arose from Tribunal's order - Held, yes FACTS For the assessment year 1963-64, the assessee's books of account were not accepted and the assessment was completed by the ITO on an income of Rs. 51,287, which included a sum of Rs. 3,500 which was shown in the assessee's books as cash credit. The assessee could not prove this cash credit and, ultimately, surrendered this amount for being included in its income. In the penalty proceedings before the IAC, the assessee contended that this cash credit of Rs. 3,500 did not represent his income and that it was a genuine cash credit. In support of this contention, the assessee filed an affidavit of one of the partners of the firm to the effect that this amount had been advanced by him to the firm. The IAC did not accept the contention of the assessee or the affidavit filed in support of it and held that the amount of Rs. 3,500 represented the concealed income of the assessee. He, therefore, levied a penalty against the assessee. The Tribunal agreed with the IAC but reduced the quantum of penalty. The Tribunal also rejected the application filed under section 256(1). On application under section 256(2) HELD In the assessment proceedings, the assessee had failed to offer any explanation at all in respect of the cash credit of Rs. 3,500 and had surrendered this amount to be included in its income. In other words, the assessee had agreed that this among might be treated as its income, which was kept outside its books of account. This would amount to a confession by the assessee that the amount of Rs. 3,500 was its concealed income. But, in the penalty proceedings, the assessee went back upon its confession and attempted to offer an explanation for the cash credit of Rs. 3,500 and also produced an affidavit of one of the partners in support of this explanation. It was no doubt open to the assessee to prove in the penalty…

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