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Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Whether Tribunal would be justified in deleting penalty ignoring provisions of Explanation to section 271(1)(c) - Held, no FACTS To the declared income of Rs. 6,197 an addition of Rs. 14,600 was made and then penalty was imposed on the assessee under section 271(1)(c). The Tribunal deleted the penalty, notwithstanding the amended provisions of section 271(1)(c) with effect from 1-4-1964. On reference: HELD It now stands settled by the Full Bench decision of this Court in Vishwakarma Industries v. CIT[1982] 135 ITR 652, that where the returned income is less than 80 per cent of assessed income the provisions of the Explanation under section 271(1)(c) become applicable and when this is so, three legal presumptions arise, namely : (i) that the amount of the assessed income is the correct income and it is in fact the income of the assessee himself, (ii) that the failure of the assessee to return the correct assessed income was due to fraud, or (iii) that the failure of the assessee to return the correct assessed income was due to gross or wilful neglect on his part. This being the position in law the Tribunal was not justified in deleting the penalty. CASE REVIEW Vishwakarma Industries v. CIT [1982] 135 ITR 652 (P&H) [FB] followed & relied upon. CASES REFERRED TO Vishwakarma Industries v. CIT [1982] 135 ITR 652 (Punj. & Har.)(FB) and Chuharmal v. CIT[1988] 172 ITR 250/ 38 Taxman 190 (SC). Ashok Bhan and Ajay Miltal for the Applicant. M.L. Garg for the Respondent. JUDGMENT Sodhi, J.-The matter here concerns the burden of proof under section 271(1)(c) of the Income-tax Act, 1961, in the context of the amendment made therein by the Finance Act, 1964. 2. The assessee, Simco Auto India, declared an income of Rs. 6,197. After the examination of the accounts of the assessee, the ITO added a further sum of Rs. 14,600 thereto and penalty proceedings were thereafter initiated…

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