Judgment Ashwini Kumar Sinha, J. 1. Pursuant to the direction of the this court by an order dated September 16, 1976, a reference has been made by the Income-tax Appellate Tribunal, Patna Bench "A", under Sec.256(2) of the I.T. Act, 1961 (hereinafter referred to as "the Act"), for the opinion of this court on the following question of law : "Whether, on the facts and the circumstances of this case, the cancellation of the penalty of Rs. 19,340 imposed on the assessee, is legal and proper ?" 2. The assessment year in question is 1964-65. The statement of case as submitted by the Tribunal speaks out the facts on the record for the assessment year in question. The assessee, as a firm, filed the return of income of Rs. 72,865. The assessment was made on a total income of Rs. 1,34,192. It included disallowance of certain expenses and also an addition of Rs. 40,000 which represented the peak credits of certain hundi loans appearing in the books of the assessee. 3. The ITO observed that the assessee had not produced the parties or adduced any documentary evidence in respect of these hundi loans and, therefore, treated this amount as the assessees income from undisclosed sources. The order of the ITO has been marked as annexure "A" to the statement of case. 4. The addition made by the ITO was upheld in appeal by the AAC as well as by the Tribunal. The Tribunal held that in the absence of satisfactory evidence about the genuineness of these hundi loans, the addition of the amount in question was justified. After the appeals, the reduced total income came to Rs. 1,17,960. 5. Thereafter, the IAC imposed a penalty under Sec.271(1)(c) of the Act with reference to the inflation in the expenses and also with reference to the unexplained hundi loans of Rs. 40,000. The IAC referred to the fact that before the assessing authorities, the assessee produced no satisfactory evidence to prove the genuineness of the deposits and, hence, he held that in the absence of any corroborative evidence, the genuineness of the deposits could not be accepted. In that view of the matter, he imposed a penalty of Rs. 19,340 on the charge of concealment of income. The order of the IAC has been marked as annexure "B" to the statement of case. 6. In that view of the matter, he imposed a penalty of Rs. 19,340 on the charge of concealment of income. The order of the IAC has been marked as annexure "B" to the statement of case. 6. The assessee went before the Tribunal and it was submitted that the expenses were disallowed only on an estimate and regarding the hundi loans, it was submitted that the assessee had stated before the lower authorities that these loans were through cheques and, hence, they should be accepted. It was further contended that there could be no penalty merely on the ground that the assessee had not been able to prove the genuineness of certain credits in its books. The Tribunal found that in the order imposing penalty, it was not clear as to on what material the penalty was imposed. The Tribunal further held that the penalty could not be imposed merely because in the assessment proceeding, the assessee did not come forward to satisfactorily establish the genuineness of the claims. The Tribunal further found that there was no indication of fraud or gross neglect on the part of the assessee and, in that view of the matter, the Tribunal did not consider it to be a fit case for imposition of penalty and cancelled the order of the IAC imposing the penalty. The order of the Appellate Tribunal has been marked as annexure "C" to the statement of case. 7. The learned senior standing counsel, appearing for the Revenue, submitted that, in the instant case, the assessee had not discharged the initial onus and the Explanation to Sec.271(1)(c) was attracted in the case. He further contended that the assessee had not produced satisfactory evidence with regard to the genuineness of the loans which, in the submission of the learned senior standing counsel, lay initially upon it before the onus could be shifted upon the Department and the Tribunal had taken an erroneous view of law in deleting the penalty imposed by the IAC. He further contended that without there being a finding by the Tribunal that the assesses had discharged its initial onus, the deletion of penalty by the Tribunal was erroneous in law. 8. Mr. He further contended that without there being a finding by the Tribunal that the assesses had discharged its initial onus, the deletion of penalty by the Tribunal was erroneous in law. 8. Mr. K.N. Jain, learned counsel appearing for the asscssee, on the other hand submitted that the assessee had already given an explanation in the assessment proceeding and it had stated that the loans were taken by cheques and this explanation given by the assessee, though in the assessment proceeding itself, was enough in the eye of law to be considered in the penalty proceeding and invited our attention to the order of the IAC and submitted that a perusal of the order was enough to indicate that the assesseee had discharged its initial onus. Learned counsel for the assessee further submitted that oven a perusal of the Tribunals order indicated that the Tribunal was not oblivious to the Explanation to Sec.271(1)(c) as the Tribunal used the words "fraud or gross neglect". Mr. Jain contended that the mere fact that the Tribunal has held that there was no indication of fraud or gross neglect on the part of the assessee, it was enough for the court to come to a conclusion that the Tribunal was fully conscious of the initial onus being upon the assessee before it could be shifted upon the Revenue and the finding of the Tribunal to the effect that there was no indication of fraud or gross neglect, amounts to discharge of the initial onus by the assessee. 9. I may at once state that the Tribunal has completely misdirected itself on the question of law. The law with regard to the imposition of penalty for deliberate and conscious concealment of income has undergone a substantial change by the insertion of the Explanation to Sec.271(1)(c) of the Act. Prior to the Explanation appended to that clause, the entire burden was upon the Department to prove by positive evidence that there was conscious and deliberate copcealment of income for the purpose of evading tax as the law stood, as laid down in the case of CIT V/s. Anwar Ali [1970] 76 ITR 696 (SC). Prior to the Explanation appended to that clause, the entire burden was upon the Department to prove by positive evidence that there was conscious and deliberate copcealment of income for the purpose of evading tax as the law stood, as laid down in the case of CIT V/s. Anwar Ali [1970] 76 ITR 696 (SC). But the insertion of the Explanation brought about a statutory presumption that in case of a difference of more than 20 per cent, in the returned income and the income assessed, the presumption would be that the assessee deliberately concealed his income and the initial onus is on the assessee to rebut that presumption and then only the onus shifts back to the Department and the law as laid down in Anwar Alis case would come into play. The initial burden of proof which has been put upon the assessee is one of a negative fact for which there can hardly be the same standard of proof as in the case of a positive fact to be proved. The law in this regard is now well settled in the case of CIT V/s. Patna Timber Works [1977] 106 ITR 452 (Pat) and the ratio of the decision in that case has been accepted and followed by practically all the High Courts and no discordant note has been struck anywhere. 10. With regard to the question of proof necessary for the assessee to discharge the onus, it is well-settled by now that the question of proof would be that required in a civil case, namely, the preponderance of probabilities, and as to what is really required is already stated in the case of Patna Timber Works [1977] 106 ITR 452 (Pat), and it is settled that 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 applied for the proof of a positive fact while the standard of preponderance of probabilities is sufficient to prove a negative fact. The Tribunal, in my opinion, seems to have been oblivious of these well settled principles of law. All that the Tribunal has said is--it is not known as to, on what material, the penalty was imposed by the IAC and that there was no indication of fraud or gross neglect on the part of the assessee. 11. The Tribunal, in my opinion, seems to have been oblivious of these well settled principles of law. All that the Tribunal has said is--it is not known as to, on what material, the penalty was imposed by the IAC and that there was no indication of fraud or gross neglect on the part of the assessee. 11. From the findings of the Tribunal, it is obvious that the Tribunal was oblivious of the well-known position in law, as stated above. These findings, in my opinion, are not enough to show that the assessee has discharged the initial onus as was on it under the Explanation to Sec.271(1)(c) of the Act. There is no finding that the assessee, in the instant case, has discharged the initial onus. The explanation given by the assessee was that it had received the amount by cheques. These cheques disclosed no information whatsoever as to the particulars of the party who had given the loan, as to what was the address of the party who had advanced the loan, as to what was the account number of the party who had advanced the loan and as to what was his address. It was, therefore, not possible for the Department to verify the genuineness of the amount. All these materials were lacking and the assessee did not come forward with any further explanation whatsoever. Hence, in my opinion, the IAC was right in holding that the assessee had not produced satisfactory evidence with regard to the genuineness of the loan. All these facts should have been taken into consideration by the Tribunal in order to see whether the assessee had discharged the initial onus which lay upon it under the Explanation. The case has, therefore, to be sent back to the Tribunal for reconsideration. If the assessee produces no fresh evidence, presents no additional or fresh circumstances in the penalty proceedings, it will be deemed to have failed to discharge the onus placed upon it. It will be open to the Tribunal to have this aspect of law in mind while dealing with the matter afresh. 12. If the assessee produces no fresh evidence, presents no additional or fresh circumstances in the penalty proceedings, it will be deemed to have failed to discharge the onus placed upon it. It will be open to the Tribunal to have this aspect of law in mind while dealing with the matter afresh. 12. I, accordingly, am of the opinion that the question referred to us for our opinion must be answered in the negative, in favour of the Revenue and against the assessee and I hold that, on the facts and in the circumstances of the case, the Tribunal was not correct in law in deleting the penalty imposed on the assessee under Sec.271(1)(c) of the Act as it stood amended at the relevant time. The case is, accordingly, sent back to the Tribunal. However, in the circumstances of the case, there will be no order as to costs. Sushil Kumar Jha, J. 13. I agree with my learned brother in the conclusion arrived at by him that the matter be remitted back to the Tribunal for reconsideration of the question at issue, keeping in view the legal fiction created by the Explanation to Section 271(1)(c) of the Act. It is needless for us to give any finding of fact on the question as to whether the initial onus has been discharged by the assessee or not, since, as my learned brother has already observed, with which I completely agree, that the Tribunal in this case was completely oblivious of the legal fiction created by the amendment by the insertion of the aforesaid Explanation. Even if the Tribunal had said in its appellate order that the explanation offered by the assessee would, in all probability, be true, the initial onus will be deemed to have bepn discharged and the matter could not have then remained in the realm of technicalities. It is for the Tribunal to decide this question of fact at to whether the preponderance of probabilities showed that the explanation offered by the assessee, namely, that the cheques in question were genuine ones was correct or not. Once the Tribunal comes to the conclusion that the presumption of probabilities, on the facts in the instant case, could be believed by the fact-finding body, the initial onus cast upon the assessee by the insertion of the Explanation would be deemed to have been discharged by it. Once the Tribunal comes to the conclusion that the presumption of probabilities, on the facts in the instant case, could be believed by the fact-finding body, the initial onus cast upon the assessee by the insertion of the Explanation would be deemed to have been discharged by it. Therefore, the Tribunal need not take into consideration the observation of my learned brother that the order passed by the IAC on facts was correct because the IAC has not proceeded in the case in proper perspective and seems to have been more or less influenced only by the fact that the genuineness of the hundi loans in question was disbelieved in the assessment proceedings, leading to the conclusion that in the penalty proceeding, the assessee would be deemed to have not discharged the initial onus. That is not the correct approach in law. These are the only few words that I have added, so that the Tribunal may not feel impelled by any observation in regard to the onus in the main judgment of my learned brother as having proved the fact that the assessee had not discharged the initial onus cast upon it.