Judgment Ajit K. Sengupta, J. 1. IN this reference under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1963-64, the following two questions have been raised at the instance of the assessee : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the penalty imposed by the Inspecting Assistant Commissioner of Income-tax? 2. WHETHER the inference drawn by the Tribunal that there is no manner of doubt that the amount of Rs. 2,62,000 up to the stage of the Hon'ble High Court was copcealed by the assessee in view of the Explanation to Section 27l(1)(c) of the Income-tax Act, 1961, is perverse?" 2. The facts leading to this reference are that the assessee filed a return of income of July 16, 1964, showing net loss of Rs. 9,817. The assessee, a private limited company, was carrying on business in the manufacture and sale of soap, coconut oil, etc., as well as dealing in bottles, corks, etc. During the assessment proceedings, the Income-tax Officer noticed cash credits in the names of 28 different parties. On scrutiny, the Income-tax Officer did not accept these cash credits as genuine and assessed the sum of Rs. 2,62,000 being the overall peak credit of the entire transactions as the assessee's income from undisclosed sources. Simultaneously, he disallowed the interest of Rs. 40,404 claimed to have been paid to the creditors. These additions were upheld on appeal by the Appellate Assistant Commissioner. For such concealment of income, proceedings under Section 27l(1)(c) were initiated. But, in spite of the service of notice, the assessee did not attend the hearing of the penalty proceedings. The Inspecting Assistant Commissioner was of the opinion that the Explanation to Section 271(1)(c) as introduced with effect from April 1, 1964, applied as the return was filed after the said date. As the assessee failed to discharge the onus reposed on him, the Inspecting Assistant Commissioner was of the opinion that the assessee had concealed the income added by the Income-tax Officer. He noticed that the tax sought to be evaded was Rs. 1,47,600. As such, he imposed a penalty of Rs. 73,800 equal to 50 percent of the tax sought to be evaded. Against the order of the Appellate Assistant Commissioner in the quantum appeal and the penalty order of the Inspecting Assistant Commissioner, the assessee preferred two appeals. He noticed that the tax sought to be evaded was Rs. 1,47,600. As such, he imposed a penalty of Rs. 73,800 equal to 50 percent of the tax sought to be evaded. Against the order of the Appellate Assistant Commissioner in the quantum appeal and the penalty order of the Inspecting Assistant Commissioner, the assessee preferred two appeals. By an order dated April 10, 1972, this Tribunal held that "the Income-tax Officer was justified in taxing the entire amount of Rs. 2,62,000 and in also disallowing the interest of Rs. 40,404 ". But, by the same order, the Tribunal held that " the Explanation does not apply to the assessment year in appeal and that the Department has failed to prove that the sum of Rs. 2,62,000 constituted the assessee's taxable income". In this view of the matter, the Tribunal cancelled the penalty imposed by the Inspecting Assistant Commissioner. Against the said order dated April 10, 1972, both the assessee as well as the Department filed reference applications on which questions regarding the addition of the amount of Rs. 2,62,000 and the disallowance of interest of Rs. 40,404 and the cancellation of the penalty of Rs. 73,800 imposed by the Inspecting Assistant Commissioner were referred to the High Court for its opinion in addition to some other questions. By a judgment dated August 9, 1982, the High Court declined to answer questions Nos. 1 to 3 referred at the instance of the assessee, as the questions were not pressed before the High Court on behalf of the assessee at the time of hearing. With regard to the question relating to the cancellation of penalty, the High Court held thus : "The Tribunal seems to have proceeded on the basis that the quantum of penalty should be imposed on the basis of the law applicable on the date and which was in operation at the time of the relevant assessment year. It seems that this question is concluded by the decision of the Supreme Court in the case of Brij Mohan v. CIT [1979] 120 ITR 1. In view of the principles laid down by the said decision, the law applicable will be the law operating on the date when the return was filed. It seems that this question is concluded by the decision of the Supreme Court in the case of Brij Mohan v. CIT [1979] 120 ITR 1. In view of the principles laid down by the said decision, the law applicable will be the law operating on the date when the return was filed. The Tribunal will bear this principle in mind and determine the penalty in the facts and circumstances of the case, and impose, if any, in accordance with the law. We, therefore, answer question No. 4, accordingly, and remand the matter to the Tribunal." 3. AS such, the decision of the Tribunal in respect of the addition of the amount of Rs. 2,62,000 and disallowance of Rs. 40,404 becomes final. 4. IN accordance with the direction of the High Court, the Tribunal heard the appeal against the penalty order. By an application dated April 4, 1988, the assessee prayed that ". . . . the Tribunal may be pleased to remand the case and pass an order which it thinks fit and proper". Submissions were made to that effect by the authorised representative for the assessee. But these submissions were strongly opposed by the Departmental representative. The Tribunal disposed of the appeal after observing as follows : "We have considered the submissions of the authorised representatives for the parties and examined the materials on record and the facts and circumstances of the case. There is no manner of doubt that the amounts of Rs. 2,62,000 and Rs. 40,404, addition and disallowance of which have become final up to the stage of the Hon'ble High Court, were concealed by the assessee in view of the Explanation to Section 271(1)(c). The assessee did not adduce any evidence to show that the concealment was not due to any fraud, gross or wilful neglect on its part. As such, the Inspecting Assistant Commissioner was justified in drawing the presumption in accordance with the Explanation that these amounts represented the concealed income of the assessee. Neither the quantum of penalty was challenged nor was any other point canvassed before us. As such, we uphold the penalty order." 5. AT the hearing before us, Mr. As such, the Inspecting Assistant Commissioner was justified in drawing the presumption in accordance with the Explanation that these amounts represented the concealed income of the assessee. Neither the quantum of penalty was challenged nor was any other point canvassed before us. As such, we uphold the penalty order." 5. AT the hearing before us, Mr. Mukherjee, learned counsel for the assessee, has contended that, as a matter of fact, this court, while directing the imposition of penalty on the facts and in the circumstances of this case, held that the assessee should be given an opportunity of being heard before any such penalty was imposed. He has drawn our attention to the application filed before the Tribunal where the assessee, on the grounds mentioned therein, asked for time to produce relevant evidence in support of the contention that some of the transactions were by cheques and, accordingly, the presumption under the Explanation could not automatically apply to the entire income assessed under the head " Other sources". He has also submitted that the findings of the Tribunal are perverse. He has also drawn our attention to the decision in the case of this assessee for the earlier assessment year which is reported in Sikri and Co. P. Ltd, v. CIT. He has also drawn our attention to the decisions of the Supreme Court in the case of CIT v. Mussadilal Ram Bharose [1987] 165 ITR 14 and in CIT v. Orissa Corporation Pvt. Ltd. [1986] 159 ITR 78. 6. ON the other hand, the contention of the Revenue is that ample opportunity was given by the Inspecting Assistant Commissioner while imposing the penalty and there was no perversity in the finding of the Tribunal. He has drawn our attention to the decision of this court in the case of CIT v. Hiralal Shanharlal [1987] 165 ITR 124. Before we proceed to consider the contention of learned counsel appearing for the parties, it is necessary to point out a few material facts having a bearing on this case. The reference for the assessment year 1963-64 so far as the penalty is concerned came up before this court in Income-tax Reference No. 20 of 1973. The reference was decided on August 9, 1982. The Tribunal did not take up the matter for hearing before the expiry of five years from that date. The reference for the assessment year 1963-64 so far as the penalty is concerned came up before this court in Income-tax Reference No. 20 of 1973. The reference was decided on August 9, 1982. The Tribunal did not take up the matter for hearing before the expiry of five years from that date. It is expected that the Tribunal should dispose of a matter when directed by this court having regard to the year of assessment involved. As we have indicated, the assessment year involved in this case is 1963-64 and this matter was disposed of by this court on August 9, 1982. The Tribunal observed in its order as follows : "More than five years thereafter since the said decision the Tribunal took up the matter and fixed hearing on October 19, 1987, on which date the assessee prayed for time on the ground that it was necessary in the interest of justice to adduce relevant evidence for a fresh decision of the Tribunal and the records of the assessee relating to 25 years back were misplaced and required time for getting at them." 7. IN the assessee's application, the Tribunal has nowhere dealt with the question why the matter was taken up for hearing after a lapse of five years. 8. IN the application dated April 4, 1989, made by the assessee for time, the assessee said that the factory as well as the registered office of the assessee remained closed on November 7, 1987, due to acute labour trouble and lock-out. It has also brought on record the fact that the assessee was not in a position to adduce evidence before the Tribunal. One of such reasons was that the factory and the office were under lock-out due to labour trouble and, accordingly, the assessee could not produce the evidence before the Tribunal. On April 4, 1988, the assessee filed an application while the factory was still under lock-out. IN the said application, the assessee submitted that, at the time of hearing of the appeals against the assessment and penalty before the Tribunal, the assessee adduced evidence, inter alia, showing that some transactions were operated by cheques and, in such circumstances, the assessee submitted, the assessee's initial burden of proving loan transactions was discharged and now the Department, by referring to the income-tax files of the creditors was to prove the contrary. The assessee relied on the decision of the Supreme Court in CIT v. Orissa Corporation Pvt. Ltd. [1986] 159 ITR 78. The assessee, accordingly, prayed that the matter be remitted to the Income-tax Officer for verification or to pass an order as it thought fit. However, the Tribunal, on consideration of the facts and circumstances of the case, held that the amount in question till the stage of the High Court was concealed by the assessee, and, accordingly, the Inspecting Assistant Commissioner was justified in imposing the penalty. 9. THE Tribunal, while dealing with the penalty matter earlier, was of the view that the Department failed to prove concealment by applying the principles laid down in CIT v. Anwar Alt. Against the said order, the Department came to this court by way of a reference which we have already indicated. We have also set out the material part of the order passed by this court in remitting the matter to the Tribunal as the Tribunal was not right in holding that the Explanation to Section 271(1)(c) was not attracted in this case. THE court directed the Tribunal that it should bear in mind that the relevant date is the date on which the return was filed and, if the Explanation was in force on that day, the Tribunal has to proceed on the basis of the amendment effected in Section 271(1)(c) by inserting the Explanation, THE direction of the court is that the Tribunal should determine, on the facts and circumstances of the case, as to whether the penalty was imposable bearing in mind the applicability of Section 271(i)(c). 10. THE question is whether in deciding the appeal on remand from the High Court, the Tribunal ought to have given further opportunity to the assessee to produce evidence. THE contention of the Revenue is that the Inspecting Assistant Commissioner had already disposed of the matter after giving an opportunity to the assessee and the assessee did not avail of such opportunity and, thereafter, on the basis of presumption, he levied penalty and as such the assessee was not entitled to any further opportunity before the Tribunal after the matter was remanded to the Tribunal. It is true that the Tribunal does not impose the penalty but the Tribunal was directed to consider the facts and circumstances of the case for the purpose of finding out whether the penalty was imposable on those facts. In other words, it was the duty of the Tribunal to bring on record the relevant facts on the basis whereof it could be said that the assessee failed to discharge the onus that lay on it under the Explanation. In Orissa Corporation Pvt. Ltd. [1986] 159 ITR 78 (SC), the case which was cited before the Tribunal and which the Tribunal did not discuss at all, the Supreme Court held that, in this case, before the Supreme Court, the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the files of the Revenue. The Revenue, apart from issuing notices under Section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do anything further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. 11. IN Sikri and Co. Pvt. Lid. [1977] 106 ITR 682, 690, a Division Bench of this court, although considered the principles in the case of Anwar All [1970] 76 ITR 696, held as follows : "So far as the third question which has been referred at the instance of the Revenue is concerned, in our opinion, the Tribunal came to the right conclusion. Apart from the failure of the assessee to prove the source of the sum, there was no other evidence to show that there was any concealment on the part of the assessee. Counsel for the Revenue contended that there was evidence in view of confessions made by some alleged creditors in their own income-tax proceedings. Apart from the failure of the assessee to prove the source of the sum, there was no other evidence to show that there was any concealment on the part of the assessee. Counsel for the Revenue contended that there was evidence in view of confessions made by some alleged creditors in their own income-tax proceedings. But, as we have mentioned before, these confessions had been made in the proceedings where the assessee was not a party and where the assessee had no opportunity to cross-examine these parties. Furthermore, there is some force in the assessee's contention that the bank statements had not been called for by the Income-tax Officer. IN these circumstances, it cannot be said that it has been proved that there was any concealment by the assessee." 12. THIS court in Hiralal Shankarlal MANU/WB/0157/1986, held as follows (at page 134) : "In my judgment, the key to the answer to this question is contained in the Explanation itself. Whenever the returned income falls short of the assessed income by the stated percentage, concealment of income will be deemed. The legal fiction is ' for the purposes of Clause (c) of this sub-section'. Therefore, the concealment of particulars of income or furnishing of inaccurate particulars of such income which had to be proved by the Department in a penalty proceeding under Section 271(1)(c) will not have to be proved now. If the assessee does not come forward to prove that there was no fraud or any gross or wilful neglect on his part, the legal fiction will come into play and the Department will be entitled to impose penalty on the strength of the deeming clause without any further ado. No hard and fast rule can be laid down about the quantum of evidence that the assessee will have to produce in order to establish that there was no fraud or any gross or wilful neglect on his part. THIS can be done from the materials already on record in the assessment proceedings. THIS can also be done by producing other evidence. It is a question of fact in every case. If the assessee is able to discharge the onus that has been imposed upon him by the Explanation of proving that there was no fraud or gross or wilful neglect on his part, the deeming Clause of concealment will not come into operation. It is a question of fact in every case. If the assessee is able to discharge the onus that has been imposed upon him by the Explanation of proving that there was no fraud or gross or wilful neglect on his part, the deeming Clause of concealment will not come into operation. If the authority concerned is satisfied that the assessee has been able to prove that there was no fraud or gross or wilful neglect on his part, there cannot be any question of imposition of any penalty. In my judgment, in a case where the Explanation applies, there is no scope for invoking the principles laid down by the Supreme Court in the case of Anwar Ali [1970] 76 ITR 696. There cannot be any question of shifting of onus of proof. In the circumstances stated in the Explanation, concealment of income is deemed. It is not presumed. The deeming clause will come into operation unless the assessee can prove what he is required to prove by the Explanation. But, if the assessee can establish that there was no fraud or gross or wilful neglect on his part, there cannot be any question of imposition of penalty thereafter. I agree with the view expressed by my learned brother, the Chief Justice, that the assessee in this case will have to prove that there was no fraud or gross or wilful neglect on his part, and that the concerned income-tax authority will have to look into the totality of the facts and circumstances and decide the question whether the assessee has been able to prove lack of fraud or any gross or wilful neglect on his part." In our view, therefore, it was necessary to find out the totality of the facts and circumstances of the case and decide the question whether the assessee has been able to prove that the concealment was not due to any fraud or gross or wilful neglect on its part. In this case, the Inspecting Assistant Commissioner of Income-tax, as we have said, proceeded on the basis that, since the presumption applied, it must be deemed that the assessee had concealed its income. As a matter of fact, the assessee was given an opportunity to appear before the Inspecting Assistant Commissioner and, on the date fixed for hearing, the assessee did not appear and, on the next date, the penalty order was passed. As a matter of fact, the assessee was given an opportunity to appear before the Inspecting Assistant Commissioner and, on the date fixed for hearing, the assessee did not appear and, on the next date, the penalty order was passed. Accordingly, in the order of the Inspecting Assistant Commissioner, there are no facts and circumstances which could warrant the conclusion that there was gross or wilful neglect on the part of the assessee to return the correct income. Similarly, before the Tribunal, although the assessee asked for time to produce the documents, the assessee was not allowed any time to produce such documents ; but the assessee contended that, at the time of the hearing of the appeal by the other Bench of the Tribunal which came up before this court by way of reference, it was contended that some of the transactions were by account-payee cheques. What the assessee intended to say was that these transactions were genuine to the extent that those were represented by cheques but, whether they were genuine or not is a matter to be gone into by the Tribunal. But the Tribunal thought, as would appear from the order which we have already extracted, that, in view of the fact that none appeared for the assessee in the reference before this court, all the questions were not, in that sense, pressed and the court declined to answer the questions. Therefore, the finding in the assessment proceedings became final. It is now well-settled that the finding in the assessment proceedings is no doubt a cogent evidence but it is not the only evidence on which one can proceed. We need not go into that question in this reference. We feel, on the facts and in the circumstances of this case, that because of the delay in taking up the matter, the assessee was denied a reasonable opportunity of hearing and the Tribunal failed to bring on record necessary facts and circumstances as directed by this court in the case of the assessee in Income-tax Reference No. 20 of 1973 (Sikri and Co. (P.) Ltd. v. CIT and C/T v. Sikri and Co. (P.) Ltd.). (P.) Ltd. v. CIT and C/T v. Sikri and Co. (P.) Ltd.). We are of the view that a further opportunity has to be given to the assessee to show whether there was any gross or wilful neglect on the part of the assessee in not returning the correct income, having regard to the difference between the assessed income and the returned income. 13. WE, therefore, decline to answer the questions referred to us. WE direct the Tribunal to dispose of the matter afresh in the light of the observations made in the judgment and the principles laid down by the Supreme Court in the several decisions cited above and any other relevant decisions that may be relied upon by the parties. The Tribunal shall give the parties a reasonable opportunity of adducing fresh evidence. In view of the fact that the assessment year involved is 1963-64, we direct the Tribunal to dispose of the matter within six months from the date a copy of this judgment is served upon the Tribunal.