Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1969-70 - Assessee filed return declaring loss - ITO rejected books of account and estimated income from contract business - Loss was, however, not disallowed and added back - There was no finding that assessee had furnished inaccurate particulars regarding loss - Whether on facts, penalty under section 271(1)(c) was not exigible on loss - Held, yes Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1969-70 - ITO added some amount as unexplained cash credits - Penalty under section 271(1)(c) was also imposed - Assessee had furnished books of accounts and also offered his explanation that there was no concealment - Assessee's cashier and accountant were also examined - In quantum appeal, Tribunal had accepted explanation offered by assessee and deleted a portion of unexplained cash credit - Whether on facts, it could be said that assessee had furnished sufficient material to discharge initial burden of proof - Held, yes - Whether since department had adduced no evidence that assessee concealed or furnished inaccurate particulars, addition representing unexplained credits could not be termed as concealed income of assessee for levy of penalty under section 271(1)(c) - Held, yes FACTS The assessee declared a loss of Rs. 1,14,330. On the basis of the evidence collected, the ITO came to the conclusion that the books were manipulated and, hence, he rejected them and estimated the income from contract business at Rs. 34,157. He also added some cash credits, but finally the Tribunal sustained only a sum of Rs. 29,000 as unexplained cash credit in the assessee's own account. There were also certain other credits to the extent of Rs. 11,580 which was sustained by the Tribunal. For these additions, the ITO initiated penalty proceedings under section 271(1)(c). The IAC came to the conclusion that the assessee had deliberately manipulated his accounts and furnished inaccurate particulars with the intention to conceal the income. Accordingly, relying on the Explanation to section 271(1)(c), he levied the minimum penalty of…

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