1984 PLP (Trib (PTD)

MIAN ABDUL KHALIQ (MEMBER).-Against the order of the learned A. A. C. of Income-tax, Range-E, Lahore, pertaining to charge year 1975-76, the assessee is aggrieved of the penalty imposed at Rs 2,509 under section 28(1-A) of the Repealed Income-tax Act, 1922 (hereinafter referred to as the 'Act').

2. The brief facts are that the appellant who is an existing assessee filed return for the year under review declaring net income of Rs. 6,729 from business- of sweetmeats. Originally the appellant's income was assessed at Rs. 19,440 vide assessment processed on 12-1-1976. Thereafter on receipt of report of the Vigilance Wing regarding investment made by the appellant in a Cinema, the I. T. O, re-opened the assessment. After holding enquiry the appellant's nit income was determined at Rs. 59,190 vide order dated 30-6-1979. The I. T. O. issued notice under 'section 28(3) of the Act for furnishing inaccurate particulars- of income. In reply thereto the appellant stated that there was no concealment of income and re-assessment was just a change of opinion on the basis of presumption and suppositions. A penalty of Rs. 5,000 was imps. On appeal quantum of assessed income being excessive was reduced and as a result imposed penalty was also reduced by the learned A. A. C. to Rs. 2,509,

3. On behalf of the appellant, it was contended that provisions of section 28(3) of the Act were not attracted in the farts acid circumstances of the instant case .as there did not exist any element of concealment. Case of the appellant's A. R. was that for the purposes of business income there being no accounts it was merely a change of opinion regarding existence of business. It was argued that no element of circumstances was involved as the appellant had himself filed return of income from sweetmeats manufacturing and estimate of declared income was substituted by the I. T. O. and its appeal further reduction was allowed by the learned A. A. C. In such like situation the plea of the appellant's A. R. was that in the absence of any wilful negligence, no penalty was leviable for concealment of income. The D. R's case was that the assessee bad withheld me actual extent of his business which was discovered by the department and as a result thereof a substantial difference in the declared and assessed income fully established concealment.

4. After giving our due consideration to the facts of the case, we of the view that the impugned penalty is inexigible. The departmental office failed to appreciate that there was neither any conscious and deliberate & element of wilful negligence nor the assessee was found to be guilty of #ka fraud. Concealment could be established by any wilful negligence of the assessee. Burden of proof of concealment was on the I. T. O. We ha noticed that invariably in every cue of re-opening of assessment not only penalty proceedings art initiated but penalty for concealment is being imposed blindly. Re-opening of assessment and concealment of income being two separate matters an to be dealt with on independent merits. As per Dictionary meaning word "conceal" means, "to hide; to withdraw from observation to cover or keep from eight to keep close or secret to refrain from disclosing; to withhold from utterance or declaration . Concealment thus will be the act of concealing or hiding. Entire burden of proof to establish concealment is on the I. T. O. It is not essential that in each case of re-opened assessment, element of concealment will be necessarily involved. Penalty for concealment could be levied only after properly establishing concealment. In C. I. T. v. A A 1970 I T R 696 it was pointed out that:- Penalty proceedings are panel in character and quasi-criminal in nature and, therefore, the onus lies upon the department to prove by positive material that a particular item which is added to the income of the assessee, which the assessee has deliberately concealed. Merely because the explanation of the assessee is inaccurate or false is by itself no ground for holding that the charge of concealment has been proved. Similarly was the view reported in 1981 P T D 119: In proceedings for penalty for concealment of income the burden is always on the revenue to prove concealment and a finding reached in the quantum appeal that a particular amount is liable to be added as income of the assessee does not automatically result in an order of penalty. In the instant case estimate of the assessee s sales and income was firstly reduced by the learned A. A. C. and finally in further appeal some in modification was made by the Tribunal. It was thus a case of change of opinion where one estimate was substitute by another. Charge of concealment have not been proved the impugned penalty is knocked off . The appeal succeeds accordingly. M. Z. M. Appeal accepted.