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Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1971-72 - Whether where income assessed by ITO was more than 80 per cent of returned income and assessee by not giving any explanation, failed to discharge onus cast upon it, Tribunal was right in holding that provisions of Explanation to section 271(1)(c) were attracted and, therefore, was justified in upholding order of ITO imposing penalty - Held, yes FACTS For the assessment year 1971-72, the assessee filed its return of income showing total income of Rs. 71,870. However, the ITO completed the assessment on a total income of Rs. 1,68,350 and initiated penalty proceed-ings under section 271(1)(c) for concealing the particulars of income. The ITO issued show-cause notices to the assessee but the latter did not file any reply. Hence, the ITO imposed a penalty under section 271(1)(c) on the ground that an item of Rs. 51,314 was debited to the purchase account which was included in entry of Rs. 2.25 lakhs thereby showing that said amount was debited twice to the purchase of goods account suppressing the profit to the said extent. No explanation was furnished except stating that it was compensatory error. On appeal, the Commissioner (Appeals) deleted the addition. On revenue's appeal, the Tribunal set aside the order of the Commissioner (Appeals). On reference : HELD With the incorporation of Explanation to section 271(1) by the Finance Act, 1964 the Apex Court has held in the cases of CIT v. Mussadilal Ram Bharose [1987] 165 ITR 14/30 Taxman 546H, CIT v. K.R. Sadayappan [1990] 185 ITR 49/ 51 Taxman 304 , Addl. CIT v. Jeevan Lal Shah [1994] 205 ITR 244/ 73 Taxman 182 and B.A. Balasubramaniam & Bros. Co. v. CIT [1999] 236 ITR 977 that it is for the assessee to discharge the onus as contemplated in the said Explanation. [Para 7] The Explanation to section 271(1)(c) was clearly attracted in the instant case inasmuch as the assessed income was more than 80 per cent of the returned income. The onus was on the applicant which, it had failed to discharge as no explanation whatsoever was given by it before the Assessing Officer. Moreover, the Tribunal had recorded a…

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