# Principal Commissioner of Income Tax (Central) ,Kanpur v. Sri Dinesh Chandra Jain

- **Citation:** (2019) 1 ILRA 503
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-26
- **Case number:** INCOME TAX APPEAL No.276 of 2015
- **Bench:** Bharati Sapru, Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/principal-commissioner-of-income-tax-central-kanpur-v-sri-dinesh-chandra-jain-44518
- **Pages:** 9

## Headnote

A. Income Tax Act, 1961: Sections 68,
132, 153A, 260A, 271(1)(c)-Burden of
proof varies in penalty proceedings from
that
in
assessment
proceedingsassessment
finding
cannot
be
automatically adopted.

Tribunal upheld the order of the assessing
authority, making an addition to the income by
treating exempted gifts received by his minor son
as assessee's income. No further challenge w.r.t.
quantum. First Appellate Authority partly allowed
penalty proceedings initiated. Tribunal while
deciding appeals of both the parties, dismissed
Revenue's appeal and allowed assessee's.
Revenue's appeal dismissed.

B.
"Concealment
of
income"
and
"furnishing of inaccurate particulars" are
different events. Both refer to deliberate
act on the part of assessee. A mere
omission
or
negligence
would
not
constitute a deliberate act of supressio
veri or suggestio falsi. (Para 21)

C.
Burden
of
proof.
In
penalty
proceedings the burden of proof varies
from
assessment
proceedings.
Any
finding
in
assessment
proceedings,
though constitutes good evidence for
penalty
proceedings,
cannot
automatically be adopted in a penalty
proceedings. The authorities are required
to consider the matter afresh from a
different
angle,
and
have
to
independently
arrive
at
a
finding
504 INDIAN LAW REPORTS ALLAHABAD SERIES
regarding "concealment of income" or of
"inaccurate particular". (Para 22, 24)

Precedent followed: -

## Text

1 All. Principal Commissioner of Income Tax (Central), Kanpur Vs. Sri Dinesh Chandra Jain 503
it has been found that substantial amount has
been spent by making payment in cash and
that too, with vouchers having been selfmade and not verifiable, admittedly, the
appellant has not maintained the stock
register and quantitative tally is not being
made. Further, the assessee has also not
shown the interest derived from FDR to the
tune of Rs. 1,93,893/- as well as the lease
rent of Rs. 1,52,590/- so received from
leasing out of JCB machines.

13. Once it has been found that the
assessee has not voluntarily maintained its
books of account, as required under the
Act, the books of account have rightly
been rejected and the net profit, which has
been fixed at 8%, is quite reasonable.
Moreover, all the authorities below have
rejected the contention of the appellant.
At this stage, no substantial question of
law arises in the present appeal.

14. The appeal is, accordingly,
dismissed. The substantial questions of
law are answered accordingly against the
Assessee and in favour of the Revenue.
-------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.08.2019

BEFORE
THE HON'BLE BHARATI SAPRU, J.
THE HON'BLE ROHIT RANJAN AGARWAL, J.

INCOME TAX APPEAL No.276 of 2015
connected with
INCOME TAX APPEAL No. 277 of 2015
INCOME TAX APPEAL DEFECTIVE No. 197 of
2015
INCOME TAX APPEAL DEFECTIVE No. 198 of
2015
INCOME TAX APPEAL DEFECTIVE No. 199 of
2015
AND
INCOME TAX APPEAL DEFECTIVE No. 200 of
2015

Principal Commissioner of Income
Tax (Central) ,Kanpur ...Appellant
Versus
Sri Dinesh Chandra Jain ...Respondent

Counsel for the Appellant:
S.S.C.I.T., Sri Praveen Kumar.

Counsel for the Respondent:
Sri Abhinav Mehrotra.

A. Income Tax Act, 1961: Sections 68,
132, 153A, 260A, 271(1)(c)-Burden of
proof varies in penalty proceedings from
that
in
assessment
proceedingsassessment
finding
cannot
be
automatically adopted.

Tribunal upheld the order of the assessing
authority, making an addition to the income by
treating exempted gifts received by his minor son
as assessee's income. No further challenge w.r.t.
quantum. First Appellate Authority partly allowed
penalty proceedings initiated. Tribunal while
deciding appeals of both the parties, dismissed
Revenue's appeal and allowed assessee's.
Revenue's appeal dismissed.

B.
"Concealment
of
income"
and
"furnishing of inaccurate particulars" are
different events. Both refer to deliberate
act on the part of assessee. A mere
omission
or
negligence
would
not
constitute a deliberate act of supressio
veri or suggestio falsi. (Para 21)

C.
Burden
of
proof.
In
penalty
proceedings the burden of proof varies
from
assessment
proceedings.
Any
finding
in
assessment
proceedings,
though constitutes good evidence for
penalty
proceedings,
cannot
automatically be adopted in a penalty
proceedings. The authorities are required
to consider the matter afresh from a
different
angle,
and
have
to
independently
arrive
at
a
finding
504 INDIAN LAW REPORTS ALLAHABAD SERIES
regarding "concealment of income" or of
"inaccurate particular". (Para 22, 24)

Precedent followed: -

1. CIT Madras Vs. Khoday Eswarsa and Sons,
[1972 83 ITR 369 (SC) (Para 20, 24)

2. Dilip N. Shroff Vs. C.I.T. (2007) 6 SCC 329
(Para 21, 24)

3. Anantharam Veersinghaiah & Co. [123 ITR
457] (Para 11, 22)

4. C.I.T. Vs. Sonali Jain, IT Appeal No. 88 of
2008 (Para 16)

5. Additional CIT Vs. Jeevan Lal Sah [1994]
205 ITR 244 (Para 14)

6. Reliance Petroproducts [322 ITR 158] (Para
13)

7. T. Ashok Pai [292 ITR 11] (Para 12)
Precedent distinguished: -

1. Ram Baboo Agrawal Vs. Commissioner of
Income Tax and another, (2018) 404 ITR 198
(All.) (Para 8, 23)
Appeal against order dated 26.09.2014
by ITAT, Delhi for the AY 2000-01 (E-4)

(Delivered by Hon'ble Rohit Ranjan
Agarwal J.)

1. All these six appeals under Section
260-A of the Income Tax Act, 1961
(hereinafter called as 'Act') arise out of the
common order passed by the Income Tax
Appellate Tribunal, Delhi, Bench "B", New
Delhi (hereinafter called as 'Tribunal') dated
26.09.2014. The leading appeal is Income
Tax Appeal No. 276 of 2015 for the
assessment year 2000-01. These appeals
were heard and decided on 22.02.2019 on the
preliminary objection raised by the assessee
regarding the territorial jurisdiction of this
Court. Today with the consent of both the
parties, the appeal is heard on merit.

2. This appeal was admitted on
16.11.2016 on the following question of
law:-

"(A) Whether on the facts and
circumstances of the case, the Hon'ble
ITAT, New Delhi is legally justified in
deleting the penalty of Rs.75,76,441/-
imposed by the AO ignoring the quantum
appeal which had been confirmed by the
Ld. CIT(A) as well as the ITAT, New
Delhi on which the penalty was imposed.

(B) Whether on the facts and
circumstances of the case, the ITAT has
not erred in law in deleting the penalty of
Rs.75,76,441/-
imposed
by
the
AO
contradicting their findings in deciding
the quantum appeal that the whole
transaction was designed to show huge
amounts as gifts without any liability of
paying taxes."

3. Income Tax Appeal No. 276 of
2015 for the assessment year 2000-01 is
being treated as leading case. The brief facts
of the case are that under Section 132 of the
Act, search and seizure was conducted on
the business premises of the persons related
to Begum Gutkha Group on 09.12.2003.
During course of search and seizure, various
books of accounts and other documents
were found and seized. In response to notice
under Section 153-A of the Act, the
assessee filed a letter on 23.02.2007 stating
that his original return filed may be treated
as return required under Section 153-A of
the Act.

4. The assessee had filed return
declaring income of Rs.1,63,65,386/- on
31.10.2000 for assessment year 2000-01.
The
assessment
in
this
case
was
completed under Section 153-A/143(3) on
1 All. Principal Commissioner of Income Tax (Central), Kanpur Vs. Sri Dinesh Chandra Jain 505
08.11.2007
at
an
income
of
Rs.3,27,87,990/- as against return income
of Rs.1,63,65,386/-. The AO in his
assessment order had made an addition of
Rs.1,64,22,604/- by treating the exempted
gifts received by the assessee's minor son
of Rs.1,52,20,000/- as his income from
other sources. Against the said assessment
order, an appeal was filed before the
Commissioner of Income Tax (hereinafter
called as 'CIT'). The assessment order was
confirmed in appeal and further on appeal
before the Tribunal, the order of the
assessing authority was upheld. No
further appeal was filed by the assessee
challenging the order of the Tribunal as
far as the quantum is concerned.

5. While, penalty proceedings under
Section 271(1)(c) of the Act were initiated
against assessee on the ground of
concealment of particulars of income and
a sum of Rs.75,76,441/- was imposed as
penalty for assessment year 2000-01, on
the ground that assessee had furnished
inaccurate particulars and had concealed
particulars of its income amounting to
Rs.1,52,20,000/-.
Aggrieved
by
the
penalty order under Section 271(1)(c),
assessee filed an appeal before CIT (A)
III, New Delhi, who partly allowed the
appeal of the assessee reducing penalty at
100% instead of 150%.

6. Against the said order, assessee as
well as Revenue filed appeal before the
Tribunal at New Delhi. The Tribunal
dismissed the appeal of Revenue and
allowed
the
assessee's
appeal
for
assessment year 2000-01 to 2005-06.

7. Sri Praveen Kumar, learned
counsel appearing for the Department
submitted that Tribunal was not correct to
set aside the penalty imposed against the
assessee under Section 271(1)(c) of the
Act,
as
assessing
authority
had
categorically given finding that gifts are
not genuine and allowable, and after
holding the gifts as unexplained, an
amount of Rs.1,52,00,000/- were taxed as
income from other source. He further
submitted that the facts of the case
suggest that furnishing of incorrect
particular/ claim and consequently the
concealment on assessee's part for which
the proceedings were initiated. It has also
been contended that assessment order
clearly demonstrated the gifts to be a
sham transaction and the said finding has
been upheld by the CIT holding these
transactions being designed to avoid
payment of tax. It was also contended that
the order of the assessing authority, First
Appellate Tribunal was confirmed by the
Tribunal, imposition of tax under Section
68 of the act and the findings given
therein had become final and further no
appeal was filed by the assessee.

8. The second limb of argument of
the counsel for the Revenue is that order
impugned passed by the Tribunal setting
aside the penalty, in fact is an order
passed by Tribunal as if it was sitting in
appeal against the order of the Tribunal in
the quantum proceedings. It has also been
submitted that the findings of original
assessment proceedings are good item of
evidence in penalty proceeding, and when
that is the case that the finding of creation
of a malicious design, on the part of the
assessee, would clearly be a relevant
evidence and has to be taken into account
while passing the penalty order. He
further laid stress that Tribunal has made
fresh inquiry and set aside the finding
given by the Tribunal itself in quantum
proceedings and rejected the imposition
of penalty on the assessee. He has relied
506 INDIAN LAW REPORTS ALLAHABAD SERIES
upon the judgment of this Court in case of
Ram Baboo Agrawal v. Commissioner of
Income-Tax and another (2018) 404 ITR
198

9. Per contra, the counsel for the
respondent- assessee submitted that the
order of the Tribunal cannot be discarded,
as while deciding the appeal it had
recorded categorical finding in regard to
the factum of gift which was duly
disclosed by the assessee in his return of
income.
Further,
assessee
had
substantiated its claim by legal evidence
which has been discussed by the Tribunal
in Para Nos. 18, 19, 20, 21 and 22 of its
order, analysing and examining in detail
the documents submitted by the assessee
in respect of the gift before the Assessing
Officer in penalty proceedings as well as
the statements of both the donors Naresh
Jain and Anil Jain being recorded in the
said proceedings.

10. It is further submitted that gifts
were
disbelieved
by
citing
human
probability and perception. It has been
stated that it would have been different
where any tangible, cogent and relevant
material was discovered by the Revenue
to disapprove the gift, but it is not correct
to merely disbelieve it on the basis of
subjective perception. It was further
contended that except for the addition on
the account of alleged fictitious gift, all
other additions made by the Revenue to
the income of assessee were deleted by
the appellate authorities.

11. Replying to the argument of the
Revenue on the question of quantum
proceedings, it was submitted that they
are not sacrosanct and impregnable for
proving a charge of concealment of
income for furnishing of inaccurate
particulars of income, for causing a
determination
on
the
question
of
liveability of penalty under Section
271(1)(c) of the Act. The counsel for the
assessee to prove his case on this point
has relied upon the judgment of the Apex
Court
in
case
of
Anantharam
Veersinghaiah and Company [123 ITR
457], which is extracted here as under:-

"Since the burden of proof in a
penalty proceeding varies from that
involved in an assessment proceeding, a
finding in an assessment proceeding that
a particular receipt is income cannot
automatically be adopted as a finding to
that effect in the penalty proceeding. In
the
penalty
proceeding
the
taxing
authority is bound to consider the matter
afresh on the material before it and, in the
light of the burden to prove resting on the
revenue, to ascertain whether a particular
amount is a revenue receipt. No doubt,
the fact that the assessment order
contained a finding that the disputed
amount represents income constitutes
good evidence in the penalty proceeding
but the finding in
the assessment
proceeding
cannot
be
regarded
as
conclusive for the purposes of the penalty
proceeding. That is how the law has been
understood by this court in Anwar Ali's
Case [1970] 76 ITR 696 (SC),and we
believe that to be the law still. It was also
laid down that before a penalty can be
imposed the entirety of the circumstances
must be taken into account and must point
to the conclusion that the disputed amount
represents income and that the assessee
has consciously concealed particulars of
his income or deliberately furnished
inaccurate particulars. The mere falsity of
the explanation given by the assessee, it
was observed, was insufficient without
there being in addition cogent material or
1 All. Principal Commissioner of Income Tax (Central), Kanpur Vs. Sri Dinesh Chandra Jain 507
evidence from which the necessary
conclusion attracting a penalty could be
drawn.These principles were reiterated by
this court in CIT v. Khoday Eswarsa and
Sons [1972] 83 ITR 369."

12. He further relied upon in case of
T. Ashok Pai [292 ITR 11] and the Apex
Court held as under:-

"Since burden of proof in
penalty proceedings varies from that in
the assessment proceeding, a finding in
an
assessment
proceeding
that
a
particular receipt is income cannot
automatically be adopted, though a
finding in the assessment proceeding
constitute good evidence in the penalty
proceeding. In the penalty proceedings,
thus, the authorities must consider the
matter afresh as the question has to be
considered from a different angle."

13. Reliance has been placed on a
recent judgment of the Apex Court in case
of Reliance Petroproducts [322 ITR
158], in which the Apex Court in regard
to the penalty proceedings held as under:-

"We do not agree, as the
assessee had furnished all the details of
its expenditure as well as income in its
Return, which details, in themselves, were
not found to be inaccurate nor could be
viewed as the concealment of income on
its part. It was up to the authorities to
accept its claim in the Return or not.
Merely because the assessee had claimed
the expenditure, which claim was not
accepted or was not acceptable to the
revenue, that by itself would not, in our
opinion, attract the penalty under Section
271(1)(c). If we accept the contention of
the revenue then in case of every Return
where the claim made is not accepted by
Assessing Officer for any reason, the
assessee will invite penalty under Section
271(1)(c). That is clearly not the
intendment of the Legislature."

14. The second argument of the
counsel for the assessee is that the finding
arrived by the Tribunal is finding of fact
to the effect that there is no material in
possession of Revenue to prove the
charge of concealment of income or
furnishing of inaccurate particulars by
assessee and the present appeals on the
behest
of
the
Revenue
are
not
maintainable. He has relied upon the
decision of the Apex Court in case of
Additional CIT v. Jeevan Lal Sah [1994]
205 ITR 244.

"Similarly, the question whether
the assessee has concealed the particulars
of his income or has furnished inaccurate
particulars of his income continues to
remain a question of fact."

15. Lastly, it has been contended
that by invoking provisions of Section 68
of the Act or by rejecting the explanation
of assessee, a presumption was drawn
against him but that presumption was
rebuttable and not at all conclusive,
particularly when considering the said
explanation in the light of penalty
proceedings. It was further submitted that
the
explanations
had
not
remained
unsubstantiated and further it can also not
be held that explanation was not bona fide
as prescribed in explanation to Section
271(1)(c) of the Act.

16. A decision of this Court in case
of CIT vs. Sonali Jain, IT Appeal No. 88
of 2008 has been relied upon, wherein this
Court held in Para Nos. 16 and 17 as
under:-
508 INDIAN LAW REPORTS ALLAHABAD SERIES

"16. In view of above, neither the
assessee-respondent failed to furnish any
explanation regarding the material facts for
computation
of
her
income
nor
the
explanation so furnished by her was false. At
least there is no finding to this effect. At the
same time, the assessee-respondent having
surrendered the above gifts as part of her
income just in order to buy peace of mind,
may be on realising that she may also be
ultimately affected by the racket of gift deeds
busted by the department without any such
thing being deducted in respect of her return
or gifts, cannot be said to have failed to prove
or substantiate her explanation regarding the
to be bona fides of the two transactions.

17. Accordingly, the assessee is
not a person who has failed to offer an
explanation or the explanation offered by
her was found to be false or that she was
unable to substantiate the explanation or
that the transactions were not bona fide
so as to attract the deeming provision
contained in Explanation 1(B) to Section
271(1)(c) of the Act. Therefore, the
amount added to her income would not be
deemed to be income in respect of which
particulars had been concealed."

17. We have heard Sri Praveen
Kumar, learned counsel for the Revenue
and Sri Abhinav Mehrotra, learned
counsel for the assessee.

18. Before proceeding, it would be
necessary to have a glance of provisions
of Section 271(1)(c) of the Act:-

"271. (1) If the Assessing
Officer or the Commissioner (Appeals) or
the Commissioner in the course of any
proceedings under this Act, is satisfied
that any person-

(a) .....................

(b) .....................

(c)
has
concealed
the
particulars of his income or furnished
inaccurate particulars of [such income,
or]

(d) .....................

he may direct that such person
shall pay by way of penalty,-

(i) ...............

(ii) ................

(iii) ...............

Explanation
1.-Where
in
respect of any facts material to the
computation of the total income of any
person under this Act,-

(A) such person fails to offer an
explanation or offers an explanation
which is found by the Assessing Officer or
the Commissioner (Appeals) or the
Commissioner to be false, or

(B) such person offers an
explanation which he is not able to
substantiate and fails to prove that such
explanation is bona fide and that all the
facts relating to the same and material to
the computation of his total income have
been disclosed by him,

then, the amount added or
disallowed in computing the total income
of such person as a result thereof shall,
for the purposes of clause (c) of this subsection, be deemed to represent the
income in respect of which particulars
have been concealed."

19. It is not in dispute that the
assessee had disclosed the fact of gift in
his return for the relevant assessment
year, but it was after the assessment
proceedings that the Assessing Officer
who did not accept the creditworthiness of
the donor as well as the genuineness of
transaction
made
an
addition
of
Rs.1,52,00,000/- as income from other
source. The said addition was sustained by
1 All. Principal Commissioner of Income Tax (Central), Kanpur Vs. Sri Dinesh Chandra Jain 509
the CIT (A) and the Tribunal. As from the
reading of Section 271(1)(c), it is clear that
that the said provisions contemplate for levy
of penalty where two conditions are satisfied,
that the assessee has concealed particulars of
his income or has furnished inaccurate
particulars of such income thus, concealment
of income and furnishing of inaccurate
particulars of income are two basic
ingredients for the initiation of proceedings
for penalty under the relevant section. The
explanation further provides, where any such
person fails to offer an explanation or offers
an explanation which is found by the
Assessing Officer or the Commissioner to be
false or such person offers an explanation
which he is not able to substantiate and fails
to prove that such explanation is bona fide
and that all the facts relating to the same and
material to the computation of his total
income have been disclosed by him, then, the
amount added or disallowed in computing
the total income of such person as a result
thereof was for the purpose of Clause (c) of
this Sub-section, be deemed to represent the
income in respect of which particulars have
been concealed.

20.

The
Apex
Court
while
considering the case CIT Madras v.
Khoday Eswarsa and Sons [1972] 83
ITR 369 (SC) held as under:-

"No doubt the original assessment
proceedings, for computing the tax may be a
good item of evidence in the penalty
proceedings but the penalty cannot be levied
solely on the basis of the reasons given in the
original order of assessment.

In the case before us we have
already pointed out that in the order
levying penalty the income-tax Officer has
categorically stated that the reasons for
adding the disputed amounts in the total
income of the assessee have been already
discussed in the original order of
assessment and that they need not be
repeated again. The Appellate Assistant
Commissioner, we have already pointed
out, has made only a guess-work. That
clearly shows that except the reasons
given in the original assessment order for
including the disputed items in the total
income, the department had no other
material or evidencefrom which it could
be reasonably inferred that the assessee
had consciously concealed the particulars
of his income or had deliberately
furnished inaccurate particulars.

For all the reasons given above,
it follows that there is no merit in the
appeal and it is accordingly dismissed. As
the respondent has not appeared, there
will be no order as to costs."

21. Further, the Apex Court while
dealing with phrase 'concealment of
income' and 'inaccurate particulars' as
used under Section 271(1)(c) of the Act
discussed in detail in the judgment of
Dilip N. Shroff v. CIT (2007) 6 SCC
Page 329. Relevant paras are Para Nos.
48, 49, 50, 51 and 71 which are extracted
here as under:-

"48. The expression "conceal" is
of great importance. According to Law
Lexicon, the word "conceal" means:

"To hide or keep secret.

The word 'conceal' is derived
from the latin concelare which implies
con + celare to hide. It means 'to hide or
withdraw from observation; to cover or
keep from sight; to prevent the discovery
of; to withhold knowledge of'. The offence
of concealment is thus a direct attempt to
hide an item of income or a portion
thereof from the knowledge of the Income
Tax Authorities."
510 INDIAN LAW REPORTS ALLAHABAD SERIES

49. In Webster's Dictionary,
"inaccurate" has been defined as:

"not accurate, not exact or
correct;
not
according
to
truth;
erroneous; as an inaccurate statement,
copy or transcript."

It signifies a deliberate act or
omission on the part of the assessee. Such
deliberate act must be either for the
purpose of concealment of income or
furnishing of inaccurate particulars.

50.
The
term
"inaccurate
particulars" is not defined. Furnishing of
an assessment of value of the property
may not by itself be furnishing of
inaccurate
particulars.
Even
if
the
Explanations are taken recourse to, a
finding has to be arrived at having regard
to clause (A) of Explanation 1 that the
assessing officer is required to arrive at a
finding that the explanation offered by an
assessee, in the event he offers one, was
false. He must be found to have failed to
prove that such explanation is not only
not bona fide but all the facts relating to
the same and material to the income were
not disclosed by him. Thus, apart from his
explanation being not bona fide, it should
have been found as of fact that he has not
disclosed all the facts which was material
to the computation of his income.

51. The explanation, having regard to
the decisions of this Court, must be preceded
by a finding as to how and in what manner
he furnished the particulars of his income. It
is beyond any doubt or dispute that for the
said purpose the Income Tax Officer must
arrive at a satisfaction in this behalf. [See
CIT v. Ram Commercial Enterprises Ltd.,
(2000) 246 ITR 568 (Del) and Diwan
Enterprises v. CIT, (2000) 246 ITR
571(Del).

71. "Concealment of income"
and "furnishing of inaccurate particulars"
are different. Both concealment and
furnishing inaccurate particulars refer to
deliberate act on the part of the assessee.
A mere omission or negligence would not
constitute a deliberate act of suppressio
veri or suggestio falsi. Although it may
not be very accurate or apt but suppressio
veri would amount to concealment,
suggestio
falsi
would
amount
to
furnishing of inaccurate particulars."

22. As noticed above in the case of
Anantharam
Veersinghaiah
and
Company (supra), it has been constant
view of the Apex Court that burden of
proof in penalty proceedings varies from
that in the case of assessment proceedings
and any finding in assessment proceeding
that a particular receipt is income cannot
automatically be adopted, though finding
in assessment proceeding constitutes good
evidences in the penalty proceedings. In
penalty proceedings the authorities must
consider the matter afresh as the question
has to be considered from a different
angle.

23. Argument of the counsel for the
Revenue that assessee failed to prove the
identity
of
the
creditors,
their
creditworthiness and the genuineness of
transaction and the same being confirmed
by
the
Tribunal
in
the
quantum
proceedings, cannot be reopened now and
looked upon in the penalty proceedings,
cannot be accepted, as penalty cannot be
levelled solely on the basis of reason
given in the original assessment order.
The reliance placed on the decision of
Ram Baboo Agrawal (supra) is in relation
to the proceedings under Section 68 and is
not applicable in the present case. As in
the penalty proceedings, case is examined
afresh for limited purpose for determining
whether the assessee has furnished
inaccurate particulars of income or has
1 All. Pr. Commisssioner of Income Tax, Gorakhpur Vs. Sahara States Gorakhpur
511
concealed the income so as to make him
liable for penalty under Section 271(1)(c)
of the Act.

24. In Khoday Eswarsa and Sons
(supra) as well as in Dilip N. Shroff (supra),
the Apex Court had examined in depth what
would constitute 'concealment of income'
and 'inaccurate particulars'. In penalty
proceedings the burden of proof varies from
that in assessment proceedings, and any
finding in assessment proceeding would not
automatically
be
adopted
in
penalty
proceedings, thus, in penalty proceedings the
taxing authorities have to independently
arrive at a finding regarding the 'concealment
of income' or of 'inaccurate particular'.

25. In the present case, the
Assessing Officer did not record any
finding as to incorrect, erroneous or false
return of income filed by the assessee
which could lead to the fact that assessee
has furnished inaccurate particulars of
income and make him liable for penalty
under Section 271(1)(c) of the Act. The
Assessing Officer had only doubted the
genuineness of the gifts on ground of
human probabilities and had also doubted
the creditworthiness of donors and
genuineness of transaction. The Tribunal
on the other hand had recorded finding
regarding the identity of creditors, their
creditworthiness and genuineness of the
transactions which were before the
Assessing Officer but he had not properly
appreciated the same and discarded and
doubted the genuineness of gifts on
ground of human probabilities, though
they were tax payers and the amounts
gifted had been disclosed in their tax
return for relevant year.

26. Instant case, is not a case of
either concealment of income or of
furnishing inaccurate particulars as neither
the assessing authority nor first appellate
authority recorded any finding to such effect
that details furnished by the assessee to be
incorrect, erroneous or false.

27. Considering the facts and
circumstances of the case, we are of the
considered opinion that the Tribunal had
recorded finding of fact that no penalty
can be imposed under Section 271(1)(c)
of the Act as Revenue has failed to
establish that assessee has concealed
income
or
furnished
inaccurate
particulars.

28. These appeals have no merit and
are hereby dismissed. The question of
law, therefore, is answered in favour of
the assessee and against the Revenue.
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APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.08.2019

BEFORE
THE HON'BLE BHARATI SAPRU, J.
THE HON'BLE PIYUSH AGRAWAL, J.

INCOME TAX APPEAL No.113 of 2016
Connected with

INCOME TAX APPEAL No.114 of 2016

Pr.
Commissioner
of
Income
Tax,
Gorakhpur ...Appellant
Versus
Sahara States Gorakhpur. ...Respondent

Counsel for the Appellant:
Sri Manu Ghildyal, Sri Ashok Kumar.

Counsel for the Respondent:
Archi Agarwal, Sri Abhinav Mehrotra, Sri
Archit Mehrotra.

A. Income Tax Act, 1961: Sections 80 IB
(10), 142(1), 143(2), 147, 148, Section