ORDER Mian Abdul Khaliq (Member).-1. Against the order of the learned A. A.C. Of Income-tax, Range-E, Lahore, pertaining to charge year 1975-76, the assessee is aggrieved of the penalty imposed at Rs. 2,509 under section 28(1-A) of the Repealed Income-tax Act, 1922 (hereinafter referred to as the 'Act').
2. The brief facts are that the appellant who is an existing assessee filed return for the year under review declaring net income of Rs. 6,729 from business of sweetmeats. Originally the appellant's income was assessed at Rs. 19,440 vide assessment processed on 12-1-1976. Thereafter on receipt of report of the Vigilance Wing regarding investment made by the appellant in a Cinema, the I.-T.O.
Re-opened the assessm ent. After bolding enquiry the appellant's net income was determined at Rs. 59,190 vide order dated 30-6-1979. The I.T.O, issued notice under section 28(3) of the Act for furnishing inaccurate particulars of income. In reply thereto the appellant stated that there was no concealment of income and reassessment was just a change of opinion on the basis of presumption and suppositions. A penalty of Rs. 5,000 was imposed. On appeal quantum of assessed income being excessive was reduced and as a result imposed penalty was also reduced by the learned A. A.C. To Rs. 2,509.
3. On behalf of the appellant, it was contended that provisions of section 28(3) of the Act were not attracted in the facts and circumstances of the instant case as there did not exist any element of concealment. Case of the appellant's A.R. Was that for the purposes of business income there being no accounts it was merely a change of opinion regarding existence of business. It was argued that no element of concealment was involved as the appellant had himself filed return of income from sweetmeats manufacturing and estimate of declared income was substituted by the I.T.O, and in appeal further reduction was allowed by the learned A A.C. In such like situation the plea of the appellant's A. R. Was that in the absence of any wilful negligence, no penalty was leviable for concealment of income. The D. R's case was that the assessee had withheld the actual extent of his business which was discovered by the department and as a result thereof a substantial difference in the declared and assessed income fully established concealment.
4. After giving our due consideration to the facts of the case, we are of the view that the impugned penalty is inexigible. The departmental officers failed to appreciate that there was neither any conscious and deliberate element of wilful negligence nor the assessee was found to be guilty of any fraud. Concealment could be established by any wilful negligence of the assessee. Burden of proof of concealment was on the I.T.O. We have noticed that invariably in every case of re-opening of assessm ent not only penalty proceedings are initiated but penalty for concealment is being imposed blindly. Re-opening of assessment and concealment of income being two separate matters are to be dealt with on independent merits. As per Dictionary meaning word "conceal" means, "to hide ; to withdraw from observation ; to cover or keep from sight; to keep close or secret; to refrain from disclosing : to withhold from utterance or declaration". Concealment thus will be the act of concealing or hiding. Entire burden of proof to establish concealment is on the I.T.O. It is not essential that in each case of re-opened assessment, element of concealment will be necessarily involved. Penalty for concealment could be levied only after properly establishing concealment.
In C.I.T, v. A...A...1970 I T R 696 it was pointed out that:- "Penalty proceedings are penal in character and ^quasi-criminal in nature and, therefore, the onus lies upon the department to prove by positive material that a particular item which is added to the income of the assessee for purposes of assessment of tax is in reality the income of the assessee, which the assessee has deliberately concealed. Merely because the explanation of the assessee is inaccurate or false is by itself no ground for holding that the charge of concealment has been proved." "In proceedings for penalty for concealment of income the burden is always on the revenue to prove concealment and a finding reached in the quantum appeal that a particular amount is liable to be added as income of the assessee does not automatically result in an order of penalty." In the instant case estimate of the assessee's sales and income was firstly reduced by the learned A. A.C. And finally in further appeal some modification was made by the Tribunal. It was thus a case of change of opinion wherein one estimate was substituted by another. Charge of concealment having not been proved the impugned penalty is knocked off. The appeal succeeds accordingly.