JUDGMENT S.K. Jha, J. This is a reference under section 256(1) of the Income-tax Act, 1961 (hereinafter to be referred to as the Act) and in the statement of case submitted by the Tribunal the following question has been referred for opinion of this Court. "Whether on the facts and the circumstances of this case the Tribunal was correct in cancelling the penalty of Rs. 6,750/- imposed under section 271 (1) (c) of the Income-tax Act, 1961 ?" 2. From the statement of the case, the relevant facts which emerge are these. The assessee is a Hindu Undivided family. The assessment year in question in this reference is 1963-64 corresponding to the previous year RN 2019. The assessee filed a return showing the income of Rs, 5,560/-. In course of the assessment proceedings, however, the Income-tax Officer added various cash credits and some amount for inadequate drawings for household expenses and thereby computed the total income of the assessee at Rs. 48,598/-. Penalty proceedings were initiated under section 271(1) (e) of the Act. The minimum penalty imposable exceeded Rs. 1,000/-, Therefore, the Income-tax Officer referred the matter to the Inspecting Assistant Commissioner under section 274(2) of the Act. The Inspecting Assistant Commissioner gave a reasonable opportunity to the assessee of being beard and after considering the explanation offered by the assessee a penalty of Rs. 6,750/- was imposed by him. The order of the Inspecting Assistant-Commissioner has been annexed as annexure A to the statement of case 3. On appeal having been preferred to the Income-tax Appellate Tribunal by the Assessee, the income of the assessee was finally reduced to Rs. 21,486/-. That was done by the Patna Bench of the Tribunal in I.T.A. 59 (Pat) of 1969-70. Some of the additions made by the Income-tax Officer as the assessing authority were, however, sustained by the Tribunal in its appellate order of assessment. Some of the amounts admittedly explained by the assessee were accepted by the Tribunal and such amounts were deleted from the taxable income of the assessee. 4. With regard to the levy of the penalty, the assessee contested the same before the Tribunal in appeal. It was submitted by the assessee before the Tribunal that the penalty imposed merely because the explanation was disbelieved was not justified in law. 4. With regard to the levy of the penalty, the assessee contested the same before the Tribunal in appeal. It was submitted by the assessee before the Tribunal that the penalty imposed merely because the explanation was disbelieved was not justified in law. The Tribunal accepting the assessee's submission cancelled the impugned penalty of Rs.6,750/- imposed upon the assessee having regard to the facts and circumstances of the case. To the facts and circumstances I shall advert hereinafter at a more appropriate place. At this place, however, it is worth noticing that the Tribunal has laid down two propositions of law in the appellate order (1) that the onus is squarely on the department to establish that the income has been consciously concealed and (ii) that apart from the falsity of the explanation given by the assessee the department must have before it, before levying the penalty, cogent material evidence from which it could be inferred that the assessee has consciously concealed the particulars of his income or furnished inaccurate particulars. The tribunal in its appellate order has, of course, applied the principles laid down by the Supreme Court in the case of CIT Vs. Khoday Eswarsa and Sons (1972) 82 I.T.R. 369, and Hindustan Steel Ltd. Vs State of Orissa (1972) 82 I.T.R. 26. Having held that the facts of conscious concealment or conscious suppression of material particulars, in the return furnished having not been proved by the department (the Revenue), the penalty could not be sustained. 5. Mr. B.P. Rajgarhia, learned Counsel for the Revenue, contends that the Tribunal has committed an error or law in laying down that the onus of proof is squarely on the Revenue authorities. It ought to have held that in view of the Explanation inserted in 1964 and in view of the deletion of the word 'deliberate' from the original Act, the initial onus was always, in terms of the explanation, on the assessee. That principle not having been applied, the appellate order of the Tribunal was evidently illegal. 6. As a bald proposition of law that Mr. Rajgarhia submits may be said to be justifiable. That principle not having been applied, the appellate order of the Tribunal was evidently illegal. 6. As a bald proposition of law that Mr. Rajgarhia submits may be said to be justifiable. The question, however, in the instant case which falls for our consideration is as to whether the Tribunal has taken note of and was conscious of the explanation inserted in 1964 in section 271 (1) (c) of the Act and as to whether in view of the explanation the provision or law has been correctly applied to the facts and circumstances of the case and the deletion of penalty by the Tribunal is justified on such facts and circumstances or not. That being the precise question for answer, I may now set but certain relevant facts which appear from the statement or the case read with annexure A, the order of the Inspecting Assistant Commissioner. 7. In the name of the son of the Karta of the HUF (the assessee) namely, Shri Lakshminarain Daga, there was a cash credit of Rs. 4,081/- and in the name of the Karta’s brother namely, Shri Ramjiwan Daga there was another cash credit showing Rs.10,500/-. There was a third item in the name of Kishanji Sewak an employee of the assessee HUF and a sum of Rs. 9,000/- was shown against him. These are the only 3 items with which we are concerned. In regard to all other items of cash credit, which had been explained by the assessee HUF but not accepted by the Revenue authorities, the Appellate Tribunal in appeal upheld the contention of the explanation offered by the assessee. It was only with regard to these 3 items as aforementioned in which the assessee's explanation was not accepted even by the Tribunal as was done by the Revenue authorities below, with regard to these 3 items, it is worthwhile to take note of what the Inspecting Assistant Commissioner has held. Apropos the sum of Rs. 4,081/-. It has been merely held that there were contradiction in the assessee's explanation. With regard to the second item of Rs. 10,500/- in the name of Shri Ramjiwan Daga, it was held that- "...it is difficult to believe that the amount was kept by his aunt for 15-18 long years on her person, which she deposited with the assessee H.U.F. on his i.e., Ram Jiwan Daga's instructions. With regard to the second item of Rs. 10,500/- in the name of Shri Ramjiwan Daga, it was held that- "...it is difficult to believe that the amount was kept by his aunt for 15-18 long years on her person, which she deposited with the assessee H.U.F. on his i.e., Ram Jiwan Daga's instructions. The story put forward by Shri Ram Jiwan Daga is indeed too naive to be believed. Apparently the sum in question belonged to assessee H.U.F. which it deposited in the name of a third party i.e. Ram Jiwan Daga so that it may pass off as a genuine deposit." With regard to the last sum of Rs. 900/- in the name of Kishanji Sewak, it was held- The salary of Shri Kishanji Sewak was too meagre to enable him to save the above amount and deposit with the assessee H.U.F. Apparently Shri Sewak confirmed the deposit to oblige the assessee H.U.F. he being in the employment of assessee H.U.F. 8. Before I proceed to discuss the principles of law relevant to the matter in issue, it is worthwhile to take note of further facts which are apparent from annexure A (the order of the Inspecting Assistant Commissioner) to the statement of the case. The assessee filed return of its income on 11.1.65 showing an income of Rs. 5,560/- only. It was however, assessed on an income of Rs. 48,590/- which included unexplained cash credits and inadequated drawing for household expenses. These 8 items may well be reproduced here- (i) Cash credit in the name of the Karta, namely Shri Meghraj Daga - Rs. 12,500/- (ii) In the name of Karta's son namely Shri Lakshmi Narain Daga - Rs. 4,001/- (iii) In the name of Karta's brother namely Shri Ramjiwan Daga - Rs. 10,500/- (iv) In the name of Pramrajjee Rathi - Rs. 4,000/- (v) In the name of Smt. Janki Devi Daga wife of the Karta - Rs. 2,200/- (vi) In the name of Kishanji Sewak an employee of the assessee HUF - Rs. 2,900/- (vii) In the name of Dhanraj Dipchand - Rs. 5,800/- The total of these 7 items of cash credits came to Rs. 39,981-. To this sum was added the 8th item, namely, for inadequate drawing for house hold expenses, which were partly held to have been made from undisclosed source, Rs. 2,900/- (vii) In the name of Dhanraj Dipchand - Rs. 5,800/- The total of these 7 items of cash credits came to Rs. 39,981-. To this sum was added the 8th item, namely, for inadequate drawing for house hold expenses, which were partly held to have been made from undisclosed source, Rs. 2,400/- The total addition thus made be the Income-tax Officer, the assessing authority, was Rs. 42,381/-. Out of these addition regarding the aforesaid 8 items made by the assessing officer, the Appellate Assistant Commissioner accepted the assessee's case with regard to the cash credit in the name of Premrajjee Rathi amounting to Rs. 4,000/- and in the name of Dhanraj Dipchand amounting to Rs. 5,800/-. Thus, the cash credits totaling Rs. 9,800/- which had been added by the Income-tax Officer were deleted from the category of assessee's income by the Appellate Assistant Commissioner. The matter having gone further up in appeal to the Appellate Tribunal, the Tribunal further accepted the assessee's case with regard to the cash credit in the name of Meghraj Daga amounting to Rs. 12,500/- and in the name of Smt. Janki Devi Daga of a sum of Rs. 2,200/-. Further more, item No.8 aforesaid regarding the inadequate drawing for household expenses amounting to Rs. 2,400/- which was added by the Income-tax Officer and affirmed by the Appellate Assistant Commissioner was also deleted by the Tribunal. It would thus be seen that out of the 7 items of cash credits and the 8th item with regard to inadequate drawing for household expenses which had been added to the income of the assessee by the Income-tax Officer, 5 items totalling quite a substantial figure were deleted either at the first appellate stage or at the final stage by the Appellate Assistant Commissioner or the Appellate Tribunal leaving only 3 items of cash credits with regard to which we are concerned. The grounds for non-acceptance of these amounts have already been quoted in extenso herein before. The non-acceptance by the Inspecting Assistant Commissioner was only on the ground that there were contradictions in the explanation of the assessee not that there was absolutely no probability of the assessee's explanation being in any event true at all, amounting either to an active or any passive concealment. 8. The non-acceptance by the Inspecting Assistant Commissioner was only on the ground that there were contradictions in the explanation of the assessee not that there was absolutely no probability of the assessee's explanation being in any event true at all, amounting either to an active or any passive concealment. 8. One further material fact to be taken note of is that before the Inspecting Assistant Commissioner the assessee's case has been that the Explanation to section 271 (1) (c) of the Act was not applicable as to the assessment year in question was the year 1963-64. This objection of the assessee did not find favour with the Inspecting Assistant Commissioner and justifiably so since the proceedings for levying penalty were started after the 1st of April, 1964 from which date the explanation aforesaid came into affect. No contention was raised before the Tribunal on behalf of the assessee that the explanation was not attracted in the instant case. It is, therefore, quite clear that the Tribunal was all along alive to the legal position that in the instant case the provisions of the explanation to section 271 (1) (c) of the Act as inserted in 1964 with effect from 1.4.64 were applicable, it is in that light that we have to see as to whether on the facts and in be circumstances of the case the Tribunal was justified in deleting the penalty of Rs. 6,750- imposed by the Inspecting Assistant Commissioner. 9. As already stated above, it is not a case of not furnishing material particulars in the return of the assessee nor is it a case of any concealment at all. In that view of the matter, we have to judge whether in the light of the explanation inserted in 1964 the Tribunal has acted in accordance with law or not. 10. There are certain well established principles of law by now with regard to the penal provision in section 271 (1) (c) of the Act during the relevant period. 11. Before the insertion of the explanation, the onus to prove all the ingredients for levying of penalty, which are required to be proved, was wholly on the department. There can be no two opinions about it. The matter has long been settled by the Supreme Court in the case of Commissioner of Income-tax V. Anwar Ali (1970) 76 I.T.R. 696. Before the insertion of the explanation, the onus to prove all the ingredients for levying of penalty, which are required to be proved, was wholly on the department. There can be no two opinions about it. The matter has long been settled by the Supreme Court in the case of Commissioner of Income-tax V. Anwar Ali (1970) 76 I.T.R. 696. The case of Anwar Ali (supra) decided by the Supreme Court has never been deviated from. The only question to be seen after the insertion of the explanation to section 271 (1) (c) of the Act in 1964 is as to what extent there has been a departure from the law of onus, prabandi as let out by the Supreme Court in the case of Anwar Ali. There is no doubt that after the amendment and insertion of the explanation as soon as it is found that there was a difference of more than 20 per cent between the income returned and the income assessed. Clause (c) of section 271 (1) of the Act comes into play. The rule of presumption embodied in the Explanation is always attracted and it is for the assessee to prove that the failure to return the correct income did not arise from any fraud or gross or willful neglect on his part. What will amount, however, to furnishing of inaccurate particulars with an element of fraud or gross or wilful neglect on the part of the assessee will depend upon the facts and circumstances or each case. The doctrine of onus in such cases cannot be put into strait-jecket of any rigid formula. Mere negligence in furnishing the particulars which are found to be inaccurate is not enough. What the explanation demands or requires of the assessee is the, discharge of the onus of proof of a negative fact, namely, that there has been no active concealment or fraud or wilful neglect on the part of the assessee. Where the onus is on one to prove a negative fact, direct evidence, generally and ordinarily, may be hardly possible. It is, however, too well settled that circumstances of mere suspicion will not warrant the conclusion of fraud. Where the onus is on one to prove a negative fact, direct evidence, generally and ordinarily, may be hardly possible. It is, however, too well settled that circumstances of mere suspicion will not warrant the conclusion of fraud. If the broad probabilities of the explanation offered are such as may be believed, though not sufficient for conclusive proof, the onus to prove such a negative fact can well be said to have been discharged by the assessee. Then, it is also well settled, the onus shifts back to the Revenue authorities to prove with reference to some positive cogent material the act of fraud on the part of the assessee for the purpose of bringing into play the provisions of clause (c) of section 271 (1) of the Act. Circumstances of mere suspicion, as already stated, will not warrant the condition of fraud. The proof must be such as to Create belief and nor merely suspicion. Care in such cases must be taken not to draw the conclusion hastily from premises that will not warrant it. A rational belief cannot be disregarded because it is not conclusively made out. Fraud may be sought to include properly all acts, omissions and concealments which involve a breach of the legal or equitable duty, trust or confidence, justly reposed, and are injurious to another or by which an under or unconscious advantage is taken of another. All surprise, thick, cunning, dissembling and other unfair way that is used to cheat anyone have been considered as being fraud by Kerr on Fraud and Mistake. But fraud in all cases implies a wilful act on the part of one where by another is sought to be deprived, by illegal or inequitable means of what be is entitled to. In cases of the present nature, it is the department which must have been sought to be deprived by such illegal means of what the Revenue is entitled to. But there can be no fraud without any intention to deprive and anything short of fraudulent intention in the strict sense will not without any action of deceit, stand in the way of imposing a penalty liability under Section 271 (1) (c) of the Act or any other Civil liability in a Court of law. 12. But there can be no fraud without any intention to deprive and anything short of fraudulent intention in the strict sense will not without any action of deceit, stand in the way of imposing a penalty liability under Section 271 (1) (c) of the Act or any other Civil liability in a Court of law. 12. The proposition which I have set forth above finds positive support from numerous Bench decisions of different High Courts with regard to the true construction of the Explanation to section 271 (1) (c) of the Act. A reference to a few decisions on the point will not be out of place. Since there is a Bench decision of our own Court to which was a party, I think it worth while to begin, contrary to chronology, in regard to the true construction of the Explanation. The case is that of Commissioner of Income-tax Vs. Patna Timber Works (1977) 106 I.T.R. 452. Untwalia, C.J., in whose judgment I had fully concurred, speaking for the Bench, had said so with regard to the explanation in question:- "The standard of proof applicable to prove a positive fact and the one which is required to prove a negative fact cannot be the same. A high standard is always applied for the proof of a positive fact while the standard of preponderance of probability is sufficient to prove a negative fact. The assessee, within the meaning of the Explanation, is required to prove that the failure to return correct income did not arise from any fraud or gross of wilful neglect on his part, that means, there is absence of fraud or gross or wilful neglect. Ordinarily and generally there cannot be any direct evidence to prove such a fact. The assessee merely has to place materials of the primary facts or the circumstances which in all reasonable probability would show that he was not guilty of any fraud or gross or wilful neglect. Ordinarily and generally there cannot be any direct evidence to prove such a fact. The assessee merely has to place materials of the primary facts or the circumstances which in all reasonable probability would show that he was not guilty of any fraud or gross or wilful neglect. He may discharge this onus by placing the facts found in the assessment order to show that the facts found therein had not in the least given an inkling of fraud or gross or wilful neglect on the part of the assessee and, therefore, it must be held without proof of any other fact that there was no fraud committed by the assessee in his failure to return the correct income nor was he acting grossly or wilfully negligently." 13. The Bench decisions of some other High Courts also need be referred to here. The case of Additional Commissioner Income-tax Punjab V. Karnail Singh Vs. Kaleran (1974) 94 I.T.R. 505 which is a Bench decision of the Punjab and Haryana High Court and that of Commissioner of Income-tax, Delhi II, Vs. Narang & Co. (1973) 93 I.T.R 462, a decision of the Delhi High Court, and the case of Additional Commissioner of Income-tax Vs. Chatur Singh Taragi (1978) 111 I.T.R. 849, a decision of the Allahabad High Court have well been pressed into service by learned Counsel for the assessee. In the Punjab Case, (Karnail Singh's case supra), it bas been observed that the purpose of the explanation is to differentiate between the two types of assessee, those who have returned a correct income upto 80 percent of the income and those who have not. In the case of the first type, the onus lies on the department to prove fraud or gross or wilful neglect in not returning the correct income and in the case of the second type of onus is on the assessee to establish that the failure to return the correct income was not on account of any fraud or gross or wilful neglect on his part. The proposition enunciated by the Supreme Court in Anwar Ali's case (supra) bas been held to be still applicable when considering the provisions of section 271 (1) of the Act, and since the section is penal in character, it has been further held by the Bench of the Punjab and Haryana High Court that if there is no evidence on the record except the explanation given by the assessee which explanation has been found to be false. It does not follow that the receipt constitutes his taxable income. In that case the department had merely rejected the explanation of the assessee and had not brought any fact to the notice of the Tribunal to bring the case within the ambit of clause (c) of section 271(1) of the Act. In that view of the matter, the High Court upheld the finding of the Tribunal that there was no proof that the assessee was guilty of any wilful or gross neglect or fraud entailing the levying of penalty against him. In the case of Narang & Co. (Supra) the Delhi High Court held that section 271(1) is not only penal or quashing criminal in nature: but departs from the normal well-established rule which would throw the burden of proof of the Revenue to establish that the assessee had consciously concealed the particulars of his income or deliberately furnished inaccurate particulars in respect thereof. The onus of proof has been placed by the Explanation to section 271(1) on the assessee who is required to prove the negative, i.e., the absence of fraud or gross or wilful neglect on his part. In the absence of any proof to the contrary, if the assessee can raise probabilities in his favour or point out circumstances which can create doubts, the benefit of this has to be given to the assessee. Penalty proceedings being distinct from the assessment proceedings, even if the assessee has failed to give a satisfactory explanation in respect of the cash credit, in the assessment proceeding, it would be open to him in the penalty proceeding to offer explanation on the basis of fresh materials. Whether any fresh material is required to be furnished in any particular case or not and the nature of such evidence to be furnished will depend on the facts and circumstance of each case, as I have already indicated above. Whether any fresh material is required to be furnished in any particular case or not and the nature of such evidence to be furnished will depend on the facts and circumstance of each case, as I have already indicated above. In the case of Chatur Singh Taragi (Supra) the High Court came to the same conclusion with regard to the construction of the Explanation to section 271(1) of the Act inserted in 1964. In that case, it may be worthwhile mentioning some minor items which had not been included in the return were, in all probability, held to have been omitted to be so included by oversight and even on such finding the imposition of penalty on the assessee was deleted. 14. These being the well-settled principles with regard to the nature, purport and scope of the Explanation to section 271(1) of the Act, in the instant case, as I have already shown above, the principles held must apply in favour of the assessee. It is not a case of not furnishing or concealing even by oversight any item in the return filed. As a matter of fact the assessee had shown all the items in question in the return filed. Out of the 8 items of additions as many as 5, coming to a total figure of substantial nature, were struck down either at the first appellate stage by the Tribunal There remained only 3 out of 8 items with regard to which it was held that the assessee has not been able to satisfactorily explain the cash credits, when called upon by a notice invoking the penal provisions of section 271(1) of the Act, the assessee furnished the explanation which could well be probable, I may stale here at the cost of re-petitioner that the Inspecting Assistant Commissioner no where found the explanation of the assessee as being palpably false or deliberately misleading so as to amount to wilful or gross neglect or fraud and/or concealment. All that was said was that there were discrepancies in the explanation offered by the assesse. In such circumstances, there being no other material apart from the explanation offered by the assessee, it can well be said hat the assessee had discharged the onus which had been fastened on him by virtue of the explanation and the onus shifted back on the Revenue. In such circumstances, there being no other material apart from the explanation offered by the assessee, it can well be said hat the assessee had discharged the onus which had been fastened on him by virtue of the explanation and the onus shifted back on the Revenue. The Revenue admittedly had no cogent material, no positive evidence of any fact, leading to an inference of active concealment or fraud or gross or wilful neglect It is not a case where the Explanation has not been pressed into service. As I have already stated above the point with regard to inapplicability of the Explanation was raised by the assessee before the Inspecting Assistant Commissioner That contention having been rejected by him the assessee never challenged that finding before the Appellate Tribunal Therefore, it cannot be presumed that the Tribunal in the instant case was oblivious of the Explanation inserted in 1964 or that it had acted as if the provision of the Explanation did not apply to the present case at all. The Tribunal was alive to the legal position since it appears from annexure-A to the statement of the case that such a point was specifically taken and the provisions of the Explanation were brought into play in the instant case 15. Mr. B.P. Rajgarhia learned Counsel for the Revenue, contended that from paragraph 4 of the appellate order of the Appellate Tribunal it would appear that the Tribunal has merely gone upon the onus of proof as laid down in the case of Anwar Ali (Supra) placing such onus squarely on the department. That, it was submitted, would lead to an inference that the Tribunal had proceeded merely upon the academic question of onus not being alive to the provision of the Explanation I do not see any justification in such a submission for the reasons already stated above. As already held earlier, the question as to whether the onus has been discharged by one party or the other will depend upon the fact and circumstances of each case. In the instant case facts as detailed above clearly point out that the initial onus of proving the negative fact, which lay upon the assessee by virtue of the Explanation, can well be said to be fully discharged by it. In the instant case facts as detailed above clearly point out that the initial onus of proving the negative fact, which lay upon the assessee by virtue of the Explanation, can well be said to be fully discharged by it. Such onus having been discharged the onus of proving the further positive fact of active concealment has already been held by the Tribunal to lie on the department. And, in the absence of cogent material or positive evidence to prove any fraud or active concealment on the part of the assessee, the Tribunal was well justified in holding that merely because the explanation offered by the assessee was not accepted by the department, it cannot be said that there was sufficient proof of active concealment of gross or wilful neglect on the part of the assessee so as to mislead the department and rob the Public Exchequer of the Revenue to which it was justly en titled entailing the penal provisions. Mr. Rajgarhia pressed upon our attention 3 decisions reported in Commissioner of Income-tax Orissa V.N.C Bohera and others (1976) 103 I.T.R. 479, Commissioner of Income-tax Orissa Vs. Puranmal Prabhudayal (1977) 106 I.T.R. 675 and a Bench decision of this Court in the case of the Commissioner of Income-tax, Bihar, Patna Vs. Parmanand Advani T.C. 133 of 1971 Dt. 1.8.78. I shall presently show, all these decisions are distinguishable and have no bearing upon the nature of the present case. In the case of N.C. Bokera (Supra) the Orissa High Court held that the provisions in the Explanation would be attracted if the penal proceedings are started after 1.4.64. That had not been done by the Tribunal. Therefore the order of the Tribunal was held to be wrong since the Tribunal had specifically stated that the explanation would not apply to that case at all. So also, in the case of Puranmal Prabhudayal (Supra) the Orissa High Court held that the Explanation applied to the facts and the burden lay on the assessee to establish that the failure to return the correct income did not arise from fraud or gross or wilful neglect. In that case also, the Tribunal had not proceeded in accordance with the provisions of the Explanation and had merely proceeded upon the question of onus of proof regardless of the presumption arising out of the Explanation. The last case referred to by Mr. In that case also, the Tribunal had not proceeded in accordance with the provisions of the Explanation and had merely proceeded upon the question of onus of proof regardless of the presumption arising out of the Explanation. The last case referred to by Mr. Rajgarhia is a Bench decision of this Court, the leading judgment of which has been delivered by my learned Brother. In that case also, the Tribunal had not applied the provisions of the Explanation at all and the only question mooted was as to whether the Explanation ought to be held to apply to the facts of that cast or not. It was held in Advani's case (supra) that the Tribunal had erred in deleting the penalty Imposed by wrongly placing the burden of proof on the department and since the Tribunal had not acted in accordance with the provisions of the explanation and had proceeded upon the Coating as if the explanation were not there on the Statute Book. The matter was sent back to the Tribunal to deal with the matters of the assessee’s appeal. 16. Thus all the 3 cases relied upon by Mr. Rajgarhia for the Revenue, were cases in which the Tribunal was oblivious of, and not alive to, the provisions of the Explanation inserted in 1964. In the instant case that is not so. Once it is held that the tribunal had in its mind the provisions of the Explanation inserted in 1964 and on the facts and in the circumstances it may be held that there was a preponderance of probability in favour of the explanation offered by the assessee. I do not see any wrong in the Tribunal's order, in such circumstances placing the burded on the Revenue and holding that in the absence of any cogent materials or material particulars being brought on record by the department, the imposition of the penalty on the finding that the explanation offered by the assessee was not tenable was not sustainable. The Tribunal, therefore, in my view, had rightly deleted in the facts and in the circumstances of the instant case the penalty imposed on the assessee by the Inspecting Assistant Commissioner. 17. In the result, therefore, I must answer the question referred in the affirmative and hold the Tribunal was correct in canceling the penalty of Rs.6750/- imposed under section 271 (1) (C) of the Income Tax Act, 1961. 17. In the result, therefore, I must answer the question referred in the affirmative and hold the Tribunal was correct in canceling the penalty of Rs.6750/- imposed under section 271 (1) (C) of the Income Tax Act, 1961. In the circumstances of the case, however, I shall make no order as to cost. 18. SHIVESHWAR PRASAD SINHA, J. I agree that the question referred to this Court for its opinion has to be answered in the affirmation that is to say, against the department and in favour of the assessee. The question which has been dealt with by my learned Brother has been dealt with in a manner to solve one of the vexed questions which has been arising in penalty matters between the assessee and the department. The law relating to the question of onus had almost got settled by the decision of the Supreme Court in the case of Anwar Ali (supra) until the Explanation to section 271 of the Act was placed in the statute. After the introduction of the explanation, the general idea which prevailed with the department has been that it was now no more its burden to do anything except to reject the assessee's explanation where the Explanation to section 271 (1) was attracted to a case. The assessee on the other band, has been having the idea that since the proceedings under section 271 (1) (C) were of a quasi criminal nature, it was always for the department to bring home the charge of concealment against him in order to validly impose penalty for concealment of income. The assessee on the other band, has been having the idea that since the proceedings under section 271 (1) (C) were of a quasi criminal nature, it was always for the department to bring home the charge of concealment against him in order to validly impose penalty for concealment of income. My learned Brother has, therefore rightly brought that the distinction which bas now to be borne in mind both by the assessee and by the department, in a case where the Explanation to section 271 (1) applies, I would like to add, by way of illustration, we may take a case where the explanation to section 271 (1) applies by season of the fact that certain credits have been added to the assessee's income as concealed income, then if in the proceedings for levying penalty for concealment of income the assessee 'gives' a plausible and cogent explanation as to the source of the cash credit which explanation had been given even earlier at the time of the assessment but had not been accepted by the department, a question may arise as to whether the non-acceptance of the assessee's explanation in the course of the assessment proceedings will be sufficient to impose penalty : always taking that the Explanation applies in terms of the Explanation, no doubt a presumption arises against the assessee that having regard to the difference between the income returned and the income assessed, there was a concealment of income But even then if a plausible and cogent explanation has been given by the assessee, what has the department to do? Should it merely go by the reasons given in the assessment order should it merely reject the explanation as not acceptable or should it do something more in order to establish that there was conscious effort on the part or the assessee to play a fraud upon the department? It is here that one has to understand the scope of the Explanation to section 271. Where an assessee has given a cogent and satisfactory explanation, the onus will then shift on the department to show by some relevant material that the explanation offered by the assessee could not be true and was not probable. It is here that one has to understand the scope of the Explanation to section 271. Where an assessee has given a cogent and satisfactory explanation, the onus will then shift on the department to show by some relevant material that the explanation offered by the assessee could not be true and was not probable. Say for example, if the source of a cash credit in the name of the assessee's brother is explained by the assessee as having been actually received from the brother the department .may show that the assessee's brother was himself a broke and that he could not have got so much cash Merely saying that the explanation was net acceptable would not do. Reference answered in favour of the assessee.