COMMISSIONER OF INCOME TAX vs SATYAVATI SHARMA (SMT.).

Faizan Uddin, J. - This is a reference made by the IT Appellate Tribunal referring for our answer the following question of law :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in not invoking the Explanation to s. 271(1)(c) to the facts the case ?"

The facts briefly stated are that the assessee filed a return for the asst. yr. 1970-71 showing the total income of Rs. 16,339. The ITO made an addition of Rs. 18,000 which represented to amount deposited in the name of the assessee with M/s. Sharma Saw Mills. The assessee could give no explanation about this amount. This addition was maintained in appeal by the AAC in the assessment proceedings. There was no further appeal. In the penalty proceedings, the ITO imposed a penalty of Rs. 18,000 u/s 271(1)(c) of the IT Act, 1961. The AAC, in appeal, held that the charge of concealment was not established and deleted the penalty. In further appeal before the Tribunal, it was contended on behalf of the Department that the Explanation to s. 271(1)(c) was applicable and a presumption arose that the assessee was guilty of concealment. This argument was negatived.

It is clear to us that the finding of the Tribunal that the Explanation to s. 271(1)(c) was not attracted, is not correct. The income returned was below eighty per cent of the income assessed and therefore, the Explanation to s. 271(1)(c) was clearly attracted. Learned counsel for the assessee submitted before us that in the circumstances of the case the presumption arising from the Explanation was rebutted. That is, however, a matter which will have to be decided by the Tribunal. Learned counsel also submitted that the assessment proceedings related to the assessee in the status of HUF, whereas the penalty imposed on her is in the status of individual which is also not justified in law. This is also a point which can be considered by the Tribunal and not by us as it is not covered by the question referred.

For the reasons given above, we answer the question referred in the negative in favour of the Department and against the assessee. There will be no order as to costs.