The main legal point established is that in the absence of positive evidence of concealment, no penalty is imposable under Section 271 (1) (c) of the Income-tax Act, 1961.

( 1 ) THE Income-tax Appellate Tribunal, Allahabad, has referred the following questions of law under Section 256 (2) of the Income-tax Act, 1961, hereinafter referred to as "the Act"), for opinion to this court :

"assessment year 1973-74 : 1. Whether, on the facts and in the circumstances of the case, there was material before the tribunal to hold that the assessee had discharged its burden to rebut the presumption of concealment ? 2. Whether, on the facts and in the circumstances of the case, when the Explanation to Section 271 (1) (c) is admittedly attracted, the Tribunals requirement of positive evidence on concealment is legally correct ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is legally correct in holding that penalty is not leviable ? assessment year 1974-75 : 1. Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that the penalty under Section 271 (1) (c) is not imposable in the absence of a finding of concealment is legally correct ? 2. Whether, on the facts and in the circumstances of the case, there was a material before the tribunal that there was gross and wilful neglect ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in cancelling the penalty imposed by the Income-tax Officer ?"

( 2 ) WE have heard Sri A. N. Mahajan, learned standing counsel for the Revenue. In spite of affidavit of service having been filed, nobody has put in appearance on behalf of the respondent.

( 3 ) BRIEFLY stated, the facts giving rise to the present reference are as follows : the reference relates to the assessment years 1973-74 and 1974-75. The respondent is a lawyer who practises before the Board of Revenue and had income from a truck also which was sold in november, 1973. For the assessment year 1973-74, the respondent declared a net income of Rs. 375. The assessment was, however, completed on a total income of Rs. 19,350 which was reduced in appeal to Rs. 14,350. The income from the truck was confirmed at Rs. 20,000 as against Rs. 11,000 declared. Similarly, for the assessment year 1974-75, he declared a net income of Rs. 5,662 whereas the assessment was completed by enhancing the income from the truck by Rs. 13,000 which was reduced in appeal by Rs. 6,000 and profit under Section 10 (2) on sale of truck was reduced from Rs. 8,506 to Rs. 7,605. The Income-tax Officer initiated penalty proceedings under Section 271 (1) (c) of the Act in respect of both the years and holding the incomes to be concealed, he levied penalties of Rs. 10,599 and Rs. 7,000, respectively, with reference to the amounts of Rs. 10,599 and Rs. 6,755, held to be the incomes concealed. The respondent being aggrieved filed appeals before the Appellate Assistant Commissioner who holding that the respondent had not furnished correct particulars of income and that he had failed to rebut the presumption of concealment available due to the application of the Explanation to section 271 (1) (c), confirmed the penalty for the assessment year 1973-74. For the assessment year 1974-75, the Appellate Assistant. Commissioner held that there was a wide difference between the income declared and the assessed income and that the respondent had failed to rebut the presumption of concealment. He also held that the respondent had tried to suppress the income from the truck and had made incorrect claim of depreciation even though the truck was sold. However, since the return was filed on April 9, 1975, i. e. , before April 1, 1976, he directed the Income-tax Officer to impose the minimum penalty under the unamended provisions of section 271 (1) (c) of the Act.

( 4 ) ON appeal, the Tribunal came to the conclusion that it was a case of an estimate against an estimate and there was no concealment and accordingly it was held that no penalty was imposable. On similar considerations, the penalty for the assessment year 1974-75 was also cancelled holding that even though the d

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