The onus of proof in proceedings under Section 28(1)(c) of the Income-tax Act, 1922, is on the Revenue to prove that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income.

( 1 ) THE question in this reference is as follows:"whether on the facts and in the circumstances of the case the Income-tax authorities were justified in imposing a penalty on the assessee under Section 28 (1) (c) of the Income-tax Act?"

( 2 ) THE assessee is a partner in the firm of Messrs. Haji Sk. Md. Hussain Md. Jan of Calcutta. The Income-tax Officer making the assessment of the assessee discovered an undisclosed bank account of the assessee with the Central Bank of India Ltd. at Bettiah in Bihar. The Income-tax Officer on scrutiny found that the assessee had made a cash deposit of Rs. 87,000 on 21 November 1946 in the said bank. The assessee on being asked to explain the source of the deposit stated that during the communal riots in Bihar in the year 1946 all his relations became panicky and they entrusted with him whatever cash they had for safe custody. The assessee said that he deposited the amounts received from his said relations in a fixed deposit account in the joint names of the assessee and his minor sons. It was also said that he held the money on behalf of his relations as trustee. The Income-tax Officer did not accept the explanation of the assessee and held that the sum of Rs. 87,000 represented the income of the assessee from an undisclosed source. The Income-tax Officer added the amount with the total income of the assessee in his personal assessment. The assessee preferred an appeal to the Appellate Assistant Commissioner and second appeal to the Tribunal. The Tribunal held that the authorities were justified in treating the amount as the assessee's income from undisclosed source.

( 3 ) THEREAFTER the Income-tax Officer started proceedings under Section 28 (1) (c) of the Income-tax Act for imposition of penalty for concealing income and deliberately furnishing inaccurate particulars thereof. The Income-tax Officer imposed a penalty of Rs. 66,000. The Appellate Assistant Commissioner on appeal reduced the amount of penalty by Rs. 22,000. The Appellate Assistant Commissioner held that the penalty which was imposed was 150 per cent of the tax sought to be evaded and he imposed penalty by 100 per cent and reduced the penalty from Rs. 66,000 to Rs. 44,000. On second appeal the Tribunal took the view that the Appellate Assistant Commissioner had misdirected himself in the decision of the case. The Tribunal expressed the view that the onus was on the Department to show that the amount of the cash said to have been concealed by the assessee was of a revenue nature assessable as income and the assessee concealed it or deliberately furnished false particulars in regard thereto. The Tribunal held that the onus was not discharged by the Income-tax authorities merely by showing that the explanation given by the assessee in the assessment proceedings was found to be false and unacceptable.

( 4 ) IT appears from the order under Section 28 (1) (c) made by the Income-tax Officer that the assessee was asked to explain the deposit of Rs. 87,000 in assessment proceedings under Section 34. The Income-tax Officer further in passing the order stated that the assessee furnished written statements from his relations which confirmed the assessee's version. The Income-tax Officer also stated that the ladies were requested to furnish the Income-tax Officer with particulars, namely, the source from which the amount was advanced and the dates of amount and also the dates on which the amounts were received back by them. No oral evidence was given by the ladies but they sent letters to the effect that the sums advanced were out of cash Rifts received by them at the time of their marriage and on other ceremonial occasions and out of savings from allowances given by their husbands. The Income-tax Officer further said that in response to the notice under Section 28 (3) the assessee repeated his claim that the sum of Rs. 87. 000 did not belong to him, but to his relatives, and Md. Zahir one of his cousins, from whom a sum of Rs.