Penalty proceedings are not to be initiated only to harass t

Last updated: 19 January 2008

Court :
SUPREME COURT

Brief :
Primary burden of proof, therefore, is on the revenue. The statute requires satisfaction on the part of the Assessing Officer. He is required to arrive at a satisfaction so as to show that there is primary evidence to establish that the assessee had concealed the amount or furnished inaccurate particulars and this onus is to be discharged by the department. While considering as to whether the assessee has been able to discharge his burden, the Assessing Officer should not begin with the presumption that he is guilty. Once the primary burden of proof is discharged, the secondary burden of proof would shift on the assessee because the proceeding under section 271(1)(c) is of penal nature in the sense that its consequences are intended to be an effective deterrent which will put a stop to practices which the Parliament considers to be against the public interest and, therefore, it is for the department to establish that the assessee is guilty of the concealment of particulars of income. The order imposing penalty is quasi-criminal in nature and, thus, burden lies on the department to establish that assessee had concealed his income. Since burden of proof in penalty proceedings varies from that in the assessment proceeding, a finding in an assessment proceeding that a particular receipt is income cannot automatically be adopted, though a finding in the assessment proceeding constitute good evidence in the penalty proceedings. In the penalty proceedings, thus, the authorities must consider the matter afresh as the question has to be considered from a different angle.

Citation :
Dilip N. Shroff v. Joint Commissioner of Income-tax, Special Range, Mumbai CIVIL APPEAL NO. 2746 OF 2007 DECIDED ON 18-5- 2007