Delhi High Court
Commissioner Of Income Tax vs A.D. Kohli on 12 January, 2004
Equivalent citations: (2004) 187 CTR Del 178, 2005 273 ITR 223 Delhi
Bench: B Patel, B D Ahmed
JUDGMENT
B. C. Patel, C.J. & Badar Durrez Ahmed, J.
1. Against the order made by the Tribunal (Delhi Bench "C", Delhi) in ITA No. 5645/Del/1997 for the asst. yr. 1992-93, the Revenue has preferred this appeal as order of penalty has been cancelled by CIT(A) and such cancellation has been confirmed by the Tribunal.
2. We are not required to examine the facts in detail, but it is apparent that the bank has given the pass book to the assessed which has not reflected the correct figures in respect of two entries only. Under the Banker's Books Evidence Act, the pass book is a documentary evidence to be acted upon, In the instant case, a copy of the ledger is also produced to show that two entries in the pass book were incorrect. The assessed has rendered the explanation and paid the tax. The CIT(A) has accepted the explanation that the assessed did not engage any accountant and was in the habit of filing his own return of income and the mistake occurred inadvertently. The explanation has been considered to be bona fide by the Tribunal also. Learned counsel for the Revenue has relied upon the judgment of Supreme Court in K.P. Madhusudhanan v. CIT and submitted that the Tribunal has seriously erred in not allowing the appeal preferred by the Revenue.
3. Expln. 1 to Section 271(1) is also required to be kept in mind at this stage.
"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 AO or the CIT(A) or the CIT 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 purpose of Clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed."
Thus, it is necessary that if a person has failed to offer an explanation or offers an explanation which is found to be false by the ITO or CIT, action can be taken. If any explanation, which is bona fide, within the totality of the case is offered and accepted as indicated by lower authorities, the assessed would be absolved of liabilities of penalty. There are two sets of evidence, one produced by the assessed in the form of a pass book and another copy of the bank ledger. The pass book normally reflects whatever is in the ledger but, if in respect of two entries there is an error committed by the bank officials and the same is relied upon by the assessed and the latter's explanation is accepted, we do not think that any case is made out. No question of law arises.
The appeal is dismissed.
