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2000 DIGILAW 1303 (MAD)

Commissioner of Income Tax v. S. I. Paripushpam

2000-12-19

K.GNANAPRAKASAM, R.JAYASIMHA BABU

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Judgment :- R. JAYASIMHA BABU, J. The Tribunal held that levy of penalty under section 271(1)(c) of the Income-tax Act, 1961, was wholly unwarranted as there had been no fraud and wilful neglect and the assessee had, only with a view to co-operate with the Department, agreed to the addition of the sum of Rs. 24, 000 in the assessment of his income for the assessment year 1974-75. The assessing authorities had no material, apart from the fact that the assessee had agreed to the addition of that sum to his income for the purpose of assessment, to hold that there had been any wilful neglect on the part of the assessee in not having included such sum in his income earlier. The Supreme Court in the case of Sir Shadilal Sugar and General Mills Ltd. v. CIT pointed out that every addition to the income of the assessee does not warrant such addition being treated as concealment of income. To quote the words of the judgment (page 713) : "There may be a hundred and one reasons for such admission, i.e., when the assessee realises the true position, it does not dispute certain disallowances, but that does not absolve the Revenue from proving the mens rea of a quasi-criminal offence". This court in the case of CIT v. Inden Bislers held that a finding of fraud is a serious matter in any context against any person and should not be lightly recorded in the absence of proper evidence in support of that finding. The court further observed that the fact that the Explanation to section 271(1)(c) of the Act required the assessee to show that there was no fraud or wilful neglect does not any way enable the Revenue to contend that there is a presumption of fraud or neglect without adducing any evidence, whatever to substantiate such assertion. In this case, evidently there is no evidence at all on the basis of which the Revenue can contend that the assessee had fraudulently or wilfully or negligently concealed the income. His agreement to the addition of the amount, by itself does not establish fraud or wilful neglect without something more. In this case, evidently there is no evidence at all on the basis of which the Revenue can contend that the assessee had fraudulently or wilfully or negligently concealed the income. His agreement to the addition of the amount, by itself does not establish fraud or wilful neglect without something more. The Tribunal has found that the Appellate Assistant Commissioner was right in holding that the amount, addition of which was agreed to by the assessee, was an amount which had been set out in an enclosure filed along with the assessee's return of income. There was, therefore, no question regarding that amount which has been fraudulently concealedHaving regard to the finding recorded by the Tribunal on the facts the conclusion reached by the Tribunal cannot be said to be erroneous. The question referred to us regarding the correctness of the Tribunal's order is, therefore, answered in favour of the assessee and against the Revenue. The respondent shall be entitled to costs on the sum of Rs. 1,500.