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Explanation to section 271(1)(c) of the income-tax act, 1961-Penalty-For concealment of income-ito imposed penalty since difference between returned income and assessed income was more than 20 per cent-tribunal deleted penalty by holding that department had not discharged its burden to prove concealment, but did not give a finding as to whether asseesee had discharged its initial onus under aforesaid explanation-whether tribunal justified-held, no Facts The ITO made additions to declared income towards cash credits, by disbelieving the assessee's explanation in respect of them and also levied penalty for concealment since the difference between the returned income and the assessed income was more than 20 per cent of the latter. Though the AAC upheld the levy of penalty, the Tribunal deleted the penalty altogether by holding that revenue had not discharged its burden to prove the factum of concealment by the assessee. On reference: Held No doubt prior to the insertion of the Explanation to section 271(1)(c), the entire burden was on the department to prove by positive evidence that there was conscious and deliberate concealment of income by the assessee. However, after the insertion of the Explanation, where the difference between the returned income and the assessed income was more than 20 per cent, the assessee would be presumed to have deliberately concealed his income and the initial burden to rebut the presumption would be on the assessee. However, the quantum of proof would be that required in a civil case, i.e.,preponderance of probability. The Tribunal was, therefore, not right in ignoring the exact import of the Explanation and in holding that the imposition of penalty on the assessee under section 271(1)( c), as it stood amended at the relevant time, was not correct in law. The matter was, accordingly, remanded to the Tribunal for reappraisal of the material on record to find out as to whether the assessee had discharged the initial burden cast on it. Case review CIT v. Patna Timber Works [1977] 106 ITR 452 (Pat.) followed. Cases referred to CIT v. Anwar Ali [1970] 76 ITR 696 (SC), CIT v. Patna Timber Works [1977] 106 ITR 452 (Pat.) and CIT v. M.…

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