Ramachandran Nair, J v. C.n.ramachandran

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 9TH NOVEMBER 2009 / 18TH KARTHIKA 1931 ITA.No. 271 of 2009() --------------------- ITA.457/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF INCOME TAX TRIVANDRUM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): APPELLANT ------------------------ M/S. P.T.CHACKO & CO. CONTRACTORS, KALANJOOR, PATHANAPURAM. ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 09/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ON 09/11/2009, THE COURT ON THE SAME DAY DELIVERED THE C .N. RAMACHANDRAN NAIR &V.K. MOHANAN, JJ. -------------------------------------------- -------------------------------------------- Dated this the 9th day of November, 2009 JUDGMENT Ramachandran Nair, J. The question raised is whether the Tribunal was justified incasting burden on the department to prove concealment of incomebefore levying penalty under Section 271(1)(c) of the Income Tax Act.Standing counsel has relied on the Division Bench decision of thisCourt in CIT V. GURUVIJAYA KURI CO. LTD., 302 I.T.R. 239(Ker.) and that of the Supreme Court in UNION OF INDIA V.DHARMENDRA TEXTILES PROCESSORS , 306 I.T.R. 277 andcontended that the Tribunal was not justified in holding that in theabsence of concealment established by the Officer, penalty could not belevied under Section 271(1)(c) of the Act. We find force in thiscontention because addition sustained is work-in-progress which isexpenditure incurred by the assessee for executing the work in theprevious year. Further, payment is received in the beginning of thesubsequent year. It is seen that assessment is sustained in appeals and assessee has not contested the orders sustaining assessment. Eventhough assessee put up a case that wages were paid after the end of theprevious year, the lower authorities have not accepted the same. In anycase, we feel the Tribunal went wrong in completely casting burden onthe department to prove concealment of income. When suppressionwas detected and addition made in assessment and sustained in appeals,it is for the assessee to establish how addition cannot be treated asincome representing concealment. Since the Tribunal has decided thecase by merely holding that the department has not discharged theirburden, which we find not acceptable, we set aside the order of theTribunal and remand the matter back to the Tribunal forreconsideration of the matter after giving opportunity to the assessee toestablish their case. (C.N.RAMACHANDRAN NAIR)Judge.Judge. (V.K. MOHANAN) Judge. kk