Onus Shifts on A.O. after assessee discharges onus cast on him by a cogent explanation

In a recent decision of the Hon’ble Supreme Court in Civil Appeal No. 9772 of 2013, dated 30.10.2013 (Mak Data P. Ltd., vs. Commissioner of Income Tax-II), the Hon’ble Supreme Court while considering the Explanation to Section 271(1), held that the question would be whether the assessee had offered an explanation for concealment of particulars of income or furnishing inaccurate particulars of income and the Explanation to Section 271(1) raises a presumption of concealment, when a difference is noticed by the Assessing Officer between the reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence and when the initial onus placed by the explanation, has been discharged by the assessee, the onus shifts on the Revenue to show that the amount in question constituted their income and not otherwise. Factually, we find that the onus cast upon the assessee has been discharged by giving a cogent and reliable explanation. Therefore, if the department did not agree with the explanation, then the onus was on the department to prove that there was concealment of particulars of income or furnishing inaccurate particulars of income. In the instant case, such onus which shifted on the department has not been discharged. In the circumstances, we do not find that there is any ground for this Court to substitute our interfere with the finding of the Tribunal on the aspect of the bonafides of the conduct of the assessee.In the circumstances, following the decision of the Hon’ble Supreme Court, we uphold the order of the Tribunal and the Tax Case Appeal stands dismissed.

HIGH COURT OF JUDICATURE AT MADRAS
Dated : 12.11.2013
Coram

The Honorable Mrs.Justice CHITRA VENKATARAMAN
and
The Honorable Mr.Justice T.S.SIVAGNANAM

Tax Case (Appeal) No. 504 of 2009
Commissioner of Income Tax,

-vs‑

M/s. Gem Granites (Karnataka)

Tax Case (Appeal) filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal Chennai ‘A’ Bench, dated 11.11.2008, ITA No.715/Mds/2007.

ORDER

(The Order of the Court was made by T.S.SIVAGNANAM, J.)

This Tax Case (Appeal) by the Revenue is directed against the order passed by the Income Tax Appellate Tribunal Chennai ‘A’ Bench, dated 11.11.2008 in I.T.A.No.715/Mds/2007, for the assessment year 1996-97.