| Case ID |
205aaec7-eb4b-4923-93d6-28397faf6217 |
| Body |
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| Case Number |
Income-tax Reference No.63 of 1983 |
| Decision Date |
Nov 18, 1996 |
| Hearing Date |
|
| Decision |
The Punjab and Haryana High Court held that when the income returned by the assessee is less than 80% of the assessed income, a presumption of concealment arises under the Explanation to section 271(1)(c) of the Income Tax Act, 1961. The assessee must prove that their failure to return the correct income did not arise from any fraud or gross neglect. In this case, the assessee failed to provide any explanation during the penalty proceedings, which led to the court finding in favor of the Department. The Tribunal's decision was overturned, and the penalty was upheld based on the presumption of concealment due to the failure of the assessee to provide adequate documentation and evidence. |
| Summary |
In the landmark case of Income-tax Reference No.63 of 1983, the Punjab and Haryana High Court analyzed the provisions of the Income Tax Act, particularly focusing on section 271(1)(c) regarding penalties for concealment of income. The court emphasized that when an assessee's declared income is significantly lower than the assessed income, a rebuttable presumption arises suggesting concealment. The onus shifts to the assessee to demonstrate that any discrepancies were not due to fraud or willful neglect. The case involved the Commissioner of Income Tax and Ajay Textiles, with prominent legal representation from senior advocates. The court ultimately ruled that the assessee failed to provide sufficient evidence to counter the presumption of concealment, leading to the upholding of the penalty imposed by the Inspecting Assistant Commissioner. This case illustrates the importance of maintaining accurate financial records and the legal responsibilities of taxpayers under the Income Tax Act. The decision serves as a critical reference for similar cases dealing with income concealment and the associated penalties. |
| Court |
Punjab and Haryana High Court
|
| Entities Involved |
Income Tax Department,
Ajay Textiles
|
| Judges |
ASHOK BHAN,
N. K. AGRAWAL
|
| Lawyers |
R.P. Sawhney, Senior Advocate,
Mahavir Ahlawat,
B.R. Mahajan,
Suvir Sehgal
|
| Petitioners |
COMMISSIONER OF Income Tax
|
| Respondents |
AJAY TEXTILES
|
| Citations |
1998 SLD 191,
1998 PTD 1332,
(1997) 224 ITR 98
|
| Other Citations |
Vishwakarma Industries v. CIT (1982) 135 ITR 652 (P & H),
Chuhrmal v. CIT (1988) 172 ITR 250 (SC),
CIT v. Anwar Ali (1970) 76 ITR 696 (SC),
CIT (Addl.) v. Karnail Singh v. Keralan (1974) 94 ITR 505 (P & H),
CIT v. Mussadilal Ram Bharose (1987) 165 ITR 14 (SC)
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
271(1)(c)
|