Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1975-76 - As assessee failed to produce 6R vouchers to substantiate claim that he had disclosed all purchases and sales in his books of account, ITO imposed penalty for concealment of income on assessee - Whether it was incumbent upon assessee to produce 6R vouchers before income-tax authorities if he wanted to show that he had not concealed particulars of his turnover - Held, yes - Whether, on facts, it could be said that assessee had failed to discharge onus which lay upon him under Explanation to section 271(1)(c) - Held, yes - Whether, therefore, Tribunal was justified in upholding levy of penalty - Held, yes FACTS The ITO imposed penalty under section 271(1)(c) on the assessee on account of concealment of income. On appeal, the Commissioner (Appeals) deleted the penalty relying on his own order in quantum appeal where he had granted relief to the assessee. On appeal of the revenue, the Tribunal sustained the order of the ITO. On reference : HELD In the assessment proceedings, the returned income was less than 80 per cent of the income assessed. Thus, the Explanation to section 271(1)(c) was attracted. The assessee had not produced any material to discharge the onus which lay upon him in order to prove that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. [Para 5] In the instant case, it was found that the additions had not been made merely on the estimate basis but on cogent material which the assessee had not been able to rebut in penalty proceedings, by offering reasonable explanation. The assessee had not even produced 6R vouchers in the penalty proceedings so as to substantiate the claim that he had disclosed all the purchases and sales in his books of account and had not concealed any particulars. [Para 16] The assessee had not produced 6R vouchers on the ground that they had been lost and misplaced and he wanted to take the benefit/advantage of the fact that the said vouchers had been produced before the sales-tax authorities who had accepted his books of account. It was incumbent upon the…

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