1. This is an appeal from the order of the Commissioner of Income-tax (Appeals) II/V-A, A bad, dated 2nd September, 1985 upholding the penalty amounting to Rs. 2,72,000 levied by the ITO under Section.
271(1)(c) of the IT Act, 1961 ('the Act'). The appellant before us is one of the sons and as such legal heir and representative of the deceased-assessee Shri Mathurbhai V. Patel.
2. The deceased-assessee Shri M.V. Patel, an individual, died on 12th July, 1975 and after his death the appellant filed the return of his income for A.Y. 1975-76 on 31st October, 1975 under Section. 139(2) of the Act, declaring a loss of Rs. 5,032. At the first hearing of the assessment proceedings, the appellant produced letter dated 15th February, 1978 along with a number of annexures and thereafter during the course of hearing he further produced another letter dated 10th March, 1978. During the course of assessment proceedings the ITO noted that the deceased-assessee had invested an amount of Rs. 2,70,000 in three bank deposits on 28-12-1974. When asked to explain the source of investment of that amount by the deceased-assessee the appellant relied upon the documents produced by him as mentioned above and contended that the deceased-assessee along with his sons, wife, two daughters-in-law and one daughter had stayed at Kampala in Uganda (East Africa) for a very long time and there in Uganda the ladies of the family viz. Smt. Surajben, wife of the deceased-assessee, Smt.
Shardaben, wife of the appellant, Smt. Sushilaben, wife of Kantilal M.Patel, another son of the deceased-assessee, and Smt. Meenaben, daughter of the deceased had by working on sewing machines produced their own incomes which they had invested in purchasing gold ornaments.
On their return from East Africa the ladies had brought their gold ornaments with them and. had kept them with the deceased-assessee. The deceased-assessee along with his sons was a partner in M/s. Mahendra Metal Industries but sometimes in December 1974 differences between the father and sons had arisen. It was under these circumstances that the deceased had sold the gold ornaments belonging to the aforementioned four ladies and had invested the sale proceeds thereof amounting to Rs. 2,70,000 in three bank deposits in the joint names of himself and his wife Smt. Surajben (since deceased). It was further explained by the appellant that after the death of the deceased on 12th July, 1975 the amount of the three bank deposits was obtained by his widow Smt.
Surajben and was distributed amongst all the ladies aforementioned as per wishes of the deceased contained in his will dated 2nd July, 1975.
The ITO did not believe this version of the source of investment in fixed deposits by the deceased-assessee. Though he examined all the ladies except Smt. Surajben who had died by that time as also two or three sons of the deceased taut found material discrepancies in their statements. The ITO was of the view that there was no evidence brought on record to prove that the ladies had brought any gold with them from East Africa and that the deceased had sold any ornaments in order to invest the sale proceeds in the three bank deposits. He further held that the alleged will deed of the deceased was not a genuine document and therefore could not be relied upon. Holding thus he came to the conclusion that the amount of Rs. 2,70,000 and the interest accrued thereupon amounting to Rs. 2,000 represented deceased's income from undisclosed sources. He accordingly treated the same as deceased-assessee's income from undisclosed sources during the accounting period under consideration.
3. It appears that on the receipt of the amounts of their shares in the fixed deposits all the four ladles declared the same in their respective returns filed by them on 9-11-1977. The ITO charged capital gains only on protective basis and completed assessments in their cases.
4. Now what happened was like this that the two daughters-in-law of the deceased Smt. Shardaben and Sushilaben and the daughter of the deceased Smt. Meenaben preferred appeals against the protective assessments made in their cases. Their appeals were however dismissed by the AAC.5. The appeal preferred by Smt. Surajben, widow of the deceased and the appeal filed by the present appellant in the case of the deceased-assessee came up for hearing before the CIT(A)-.II, Ahmedabad.
It appears that during the pendency of these two appeals the will alleged to have been executed by the deceased on 2nd July, 1975 was required to be re-examined by the ITO in order to find out the genuineness of the signatures of the deceased on the said documents. On making a comparison of the signatures of the deceased on the will deed with his signature on the documents filed in City Civil Suit No. 3084 of 1974 the ITO felt satisfied that the signatures on the will were those of the deceased-assessee. The learned CIT(A), on the basis of the report of the ITO, treated the will of the deceased as a genuine document and allowed both the appeals.
6. The matter however came up before the Tribunal in the appeals preferred by the three ladies mentioned a,bove against the order of the AAC and the appeals preferred by the department against the order passed by the CIT(A) in the cases of the deceased-assessee through the present appellant and of Smt. Surajben, the widow of the deceased. The Tribunal held that the assessee had signally failed to prove the source of the deposits. It therefore reversed the order of the CIT(A) as passed in the cases of the deceased-assessee and his widow and restored that of the ITO. That is how the assessment stood finalised at positive income of Rs. 2,71,740 in the case of the deceased-assessee for A.Y.1975-76.
7. In the course of assessment proceedings in the case of the deceased-assessee the ITO had initiated penalty proceedings under Section. 271(l)(c) read with Explanation thereto by issuing a notice under Section. 274 of the Act to the appellant. In answer to such notice the appellant offered his explanation on the lines indicated above. The ITO rejected such explanation on the grounds as mentioned by him in his assessment order. While passing the penalty order the ITO held as follows: I therefore hold that the assessee has concealed the particulars of income and/or furnished inaccurate particulars of income within the meaning of the substantive provision of Section 271(1)(c) of the Act and he has also concealed the particulars of income and/or furnished inaccurate particulars of income as provided in the Explanation thereto.
The ITO therefore levied a penalty of Rs. 2,72,000 which was the minimum leviable. The appellant appealed to the CIT(A).
8. Finding the order as passed by the ITO quite detailed and self-contained running over 19 pages the learned CIT(A) did not consider it necessary to either refer to the facts or to discuss the evidence. It appears to have been contended before him that the present case was not a case of an unexplained cash credit as the legal heirs of the deceaaed-assessee had discovered the bank deposits only after the death of the assessee but the learned CIT (A) rejected this contention as being irrelevant to the issue of concealment which had specifically been done by the deceased-assessee during his lifetime. According to the CIT(A) the present was a case of an act of commission by the assessee and not that of mere omission. According to him it was a case where the assessee had failed to disclose at any stage before the tax authorities that he had in his possession fixed deposits financed by cash for Rs. 2,72,000. The CIT(A) was further of the opinion that in the present case the assessee had never disclosed to the WTO the alleged possession of jewellery from the sale of which financing of the fixed deposits had been claimed by him. The learned CIT(A) appears to have taken specific note of the finding of the Tribunal in quantum appeal, as mentioned above, and against which the Tribunal had declined a reference also. The learned CIT(A) thus dismissed appellant's appeal.
Hence this appeal before us.
9. Mr. J.P. Shah, the learned counsel for the assessee has assailed the order under appeal on legal aspects as well as on merits. On legal aspects of the penalty order as passed by the ITO and as confirmed by the CIT(A) in appeal in the present case Mr. Shah submitted that by the use of both the conjunctions 'and/or' it is abundantly clear that the ITO had failed to come to a definite conclusion with regard to the act of the assessee attracting penal provisions in the present case. Mr.
Shah explained that the ITO has failed to point out as to whether it was a case of concealment of particulars of income or whether it was a case of furnishing inaccurate particulars of such income. Mr. Shah further submitted that in a case where the ITO could not arrive at a definite conclusion on the point as to whether penalty was imposable for concealment of the particulars of the income or for furnishing inaccurate particulars of such income penalty under Section 271(1)(c) of the Act cannot be levied. In this respect Mr. Shah invited our attention to the part of ITO's order as has been mentioned above and supported his view point from the decision of the Gujarat High Court in the case of CIT v. Manu Enggnier. Works [1980] 122 ITR 306. In reply Mr. P.D. Khandelwal, the learned DR not only supported the order under appeal but also submitted that in the present case on thorough examination of the material placed before him the ITO had recorded a clear finding with regard to the concealment of the particulars of the income by the deceased-assessee as also with regard to the furnishing of inaccurate particulars of such income by the appellant. Mr.
Khandelwal thus submitted that where the entire material has been placed before the Tribunal, it may come to its own conclusion with regard to the act done by the assessee attracting penal consequences and thus the order under appeal may conveniently be upheld. After hearing both the parties on the point before us and after having considered the ratio of the Gujarat High Court decision in the case relied upon by Mr. Shah we have been left in no doubt that in the presence of a binding decision of the point we have no alternative but to accept the contention of Mr. Shah.
10. It need not be stressed that the provisions of Section 271(l)(c) are penal in character and the proceedings are quasi-criminal in.
nature. Section 271(1)(c) contemplates two fact situations. It clearly says that penalty can be imposed where the assessee has concealed the particulars of his income. This part of Clause (c) of Section 271(1) proceeds on the footing that an assessee has not at all furnished the particulars of his income and that is why a case of concealed income arises for imposing penalty. In the later part penalty is imposable on an assessee's failure of furnishing accurate particulars of his income.
This part of this clause proceeds on the footing that an assessee has though furnished the particulars of his income yet such particulars were inaccurate. Thus while the former proceeds on the ground that particulars of income have not at all been furnished the latter proceeds on the footing that such particulars had no doubt been furnished by an assessee but the same were found inaccurate. Both these fact situations cannot run together and are obviously mutually exclusive. That being the legal position of the requirement of applicability of Clause (c) of Section. 271(1) it is but necessary on the part of the ITO to clearly say as to whether he is going to impose penalty for concealment of the particulars of income of the assessee or for his failure to furnish correct/ accurate particulars of such income. There is no doubt that by issuing a notice under Section. 274 of the Act the ITO may require the assessee to explain both the fact situations mentioned above. But in order to impose penalty under Clause (c) of Section. 271(1) the ITO shall have to record a definite finding as to whether he had found a case of concealment of particulars of income or a case of furnishing inaccurate particulars of such income.
He cannot impose penalty on an assessee for both of the fact situations at one and the same time.
11. In the present case we have extracted the relevant part of ITO's order in extenso. It is clear that at the time of imposition of penalty upon the assessee the ITO could not record a clear finding as to whether he intended to impose penalty for concealment of particulars of income of the assessee or for furnishing inaccurate particulars of such income. That being the position of the penalty order passed in this case there is no escape from the conclusion that the principle laid down by the Gujarat High Court in the case of Manu Enggineer. Works (supra) apply with all force to the case on hand. It was held in the said case that where there was no clear-cut finding recorded by the assessing officer on the point whether he intended, to impose penalty for assessee's concealing the particulars of income or for his furnishing inaccurate particulars of such income the order of penalty was liable to be struck down. As held in the said case the order under appeal cannot legally be sustained and is liable to be struck down on this ground alone.
12. The parties however argued the case on merits also and we were particularly required to appreciate their contention in the light of the material brought on record. On merits, therefore, it was vehemently urged by Mr. Shah that in the present case the appellant had done all that he could have been expected to do about the facts and circumstances attending on the investments in the fixed deposits by the deceased-assessee. Mr. Shah particularly invited our attention to appellant's letters dated 15th February, 1978 and 10th March, 1978 and the various documents submitted along with those letters Mr. Shah contended that the appellant had placed the relevant material before the ITO It was further submitted by Mr. Shah that the act of placing all the relevant material before the ITO clearly exhibited a bona fide conduct on the part of the appellant in the submission of the return.
It was further submitted that by doing so the appellant had clearly negatived the presence of any fraud or gross or wilful neglect on his part in not returning the correct income in the present case. Mr. Shah particularly submitted that in the wealth-tax assessment of the deceased-assessee for the year under consideration the said amount of Rs. 2,70,000 was never assessed and that in the estate duty assessment proceedings also the said amount was never added to the principle value of his estate. Taking us through the various pages of the paper book Mr. Shah stressed that it was clearly established on record that the decea-sed along with his family including female members had been staying in Bast Africa for sufficiently a long time and that there in East Africa the ladies had earned their own incomes which they had invested in purchasing gold ornaments. Mr. Shah referred us to the Passenger (Non-Tourist) Baggage Rules, 1957 framed by the Central Board of Revenue under Section. 75 of the Sea Customs Act, 1978 (Act 8 of 1978) and submitted that jewellery not exceeding Rs. 5,000 in value being brought by a passenger as his personal effect was not required to be subjected to customs duties and therefore the ladies could have very well brought the gold ornaments with them at the times of their repeated visits to India from East Africa during the period of their stay abroad. Mr. Shah also invited our attention to various papers on the paper book showing the remittance of Rs. 1,82,500 by the members of the family of the deceased to India. It was thus submitted that though the burden of proving the conditions attracting penalty under Section.
271(1)(c) of the Act was there on the shoulder of the revenue yet the appellant had by cogent and convincing evidence positively proved that the concealment of income amounting to Rs. 2,72,000 had not resulted from any fraud or gross or wilful neglect on the part of the appellant and therefore no penalty was imposable upon him. In support of his arguments Mr. Shah heavily relied upon the Gujarat High Court decision in the case of CIT v. Vinaychand Harilal [1979] 120 ITR 752.
13. In reply Mr. Khandelwal vehemently stressed that the difference between the returned income and the assessed income exceeding 20 per cent in the present ease the provisions of the Explanation to section 271(1)(c) were attracted to the facts and circumstances of the present case. Once the Explanation stood attracted to the present case, contended Mr. Khandelwal it was for the appellant to have discharged the onus of proving that he had not concealed the praticulars of the income of the assessee or had not furnished inaccurate praticulars of such income. According to Mr. Khandelwal the appellant in the present case had miserably failed to discharge the burden which was there on his shoulders and therefore the authorities below had correctly levied penalty upon him. Mr. Khandelwal, in support of his arguments, heavily relied upon the decision of the Allahabad High Court In the case of Addl. CIT v. flam Prakash [1981] 128 ITR 559, the decision of the Calcutta High Court in the case of V.P. Samtani v. CIT [1988] 140 ITR 693 and the Fall Bench decision of the Punjab & Haryana High Court in the case of Vishwakarma Industries v. CIT [1982] 135 ITR 652.
14. Before we proceed to appreciate the merits of the present case we consider it worthwhile to observe that since the difference between the returned income and the assessed income admittedly exceeded 20 per cent the provisions of Explanation to Section. 27l(1)(c) are clearly attracted to the present case. It is well settled that once the Explanation to Section. 271(1)(c) stands attracted to a given case the burden of proving that the concealed income had not resulted from any fraud, gross or wilful neglect on his part lies on the assessee. The effect of the application of Explanation to Section. 271(1)(c) obviously is that the initial burden which was there on the revenue before the insertion of the Explanation automatically shifts to the assessee. As has been observed by the Punjab and Haryana High Court in the case of Vishwakarma Industries (supra), the application of the Explanation raises three legal presumptions against an assessee viz.
(1) that the amount of the assessed income is the correct income and it is in fact the income of the assessee himself, (2) that the failure of the assessee to return the aforesaid correct assessed income was due to fraud, or (3) that the failure of the assessee to return the aforesaid correct assessed income was due to gross or wilful neglect on his part.
The legal presumptions created by the Explanation are however rebuttable and an assessee can successfully prove, by leading some affirmative evidence or by relying on the material on record that there was no fraud or gross or wilful neglect on his part to return the correct income. In that view of the matter the proposition laid down by the Supreme Court in the case of CIT v. Anwar Ali [1970] 76 ITR 696 that the burden of proof squarely lies on the department will not apply to a case under Section. 271(1)(c) after coming into force of the Explanation thereto with effect from 1-4-1976, if Explanation is applicable to such a case. In our approach to the present case one more factor shall have to be kept in mind Herein it cannot be lost sight of that it was not that assessee himself whose income was to be assessed, had filed the return. It was one of Ms legal heirs and representative who was obliged to file the return of income of the deceased-assessee due to his death. It is in the light of these principles that we intend to approach the facts of the present case and to see whether the appellant had succeeded in proving that there was no fraud or gross or wilful neglect on his part in not returning correct income of the deceased-assessee. In order to find the correct answer to this question we shall have to look into the totality of the facts and circumstances of the case and the material brought on the record.
15. Now coming to the merits of the case the material placed before us discloses that it was in the year 1925 or thereabout that the deceased-assessee Shri M.V. Patel had left for Uganda, presumably in search of good fortune there. His wife Smt. Surajben M. Patel, his five sons S/Shri Navinbhai, Kantibhai, Sumanbhai, Jashubhai, Mahendrabhai, and the minor daughter Meenaben had also joined him in due course of time. Navinbhai was married sometime in 1953 and soon after Ms marriage his wife Smt. Shardaben also went to Uganda. Similarly Kantilal was married to Smt. Sushilaben sometime in 1955 and thereafter she also went there. The deceased returned from Uganda sometime in 1958.
Navinbhai and Kantibhai along with their wives returned sometime in 1960. The case put forward by the appellant before the ITO was that no doubt this family of his father had started with a humble beginn-ing yet in due course of time it had good income from transport business.
It had further been submitted that the ladies of the house also used to work on sewing machines and this used to add to the income of the family. On going through the statements of the ladies as recorded by the ITO during the course of assessment proceedings it is gathered that they have stated that in Uganda generally the females of all the families used to do some work and to add to the income of the family.
This seems to be quite reasonable, Then the case of the appellant was that the ladies invested their savings in gold ornaments and brought such gold ornaments to India as and when they happened to visit India.
This cannot also be termed as an unusual or abnormal conduct of the ladies. Now the case of the appellant was that it was in that way that the ladies of the family had managed to have 590 tolas of gold ornaments in their collective possession. On their return to India the male members of the family had started business under the name of Mahendra Metal Industries and that position is stated to have remained up to September 1974. It was in September 1974 that some differences arose between the father and the sons and such differences led them to exchange legal notices and even to approach the Court. It is gathered from the documents placed before us that perhaps the deceased had felt much interested in his younger son with whom he was staying in a bungalow in Rajan Society and whom he wanted to establish in another business to be started under the name of Patel Metal Industries. Anyway the facts relevant to the investment of Rs. 2,70,000 by the deceased in three fixed deposits with Central Bank of India, Mithakali branch on 28th December, 1976 are that the females had allegedly left their jewelleries with the deceased on safety considerations. It is alleged that it was sometime in December 1974 that the deceased had sold such jewelleries and had deposited the proceeds thereof in three bank deposits in the joint names of himself and his wife Smt. Surajben. The ITO rejected this version on the ground that neither the acquisition of gold ornaments by the ladies was successfully proved nor the sale thereof. He found certain discrepancies in the statements of the ladies and doubted whether they could have brought gold in huge quantity from abroad without undergoing the rigours of Customs Act. He further disbelieved that the ladies would have given their ornaments to the deceased even in the wake of disputes in the family. There is no doubt that it was not proved on record that the deceased had sold gold ornaments a few months prior to his death but at the same time it cannot be totally rejected that the ladies of the house could have procured gold ornaments from their savings. They had tried to explain that they were having some ornaments as given to them at the time of their marriages and the rest had been purchased by them from their earnings in Uganda. Smt. Meenaben was given some gold by her two sisters-in-law and such a gift cannot be claimed to be quite unusual in our families. The authorities below seem to have been much influenced by the approach adopted and findings recorded on this point in assessment proceedings. Here we would like to observe that where by virtue of application of the Explanation in a given case the burden to prove that he did not conceal the particulars of his income or did not furnish the inaccurate particulars of such income shifts on to the assessee from the revenue, the assessee may discharge such burden either by producing necessary evidence afresh or even by relying upon the material already existing on the record of assessment proceedings.
Penalty proceedings are distinct from and independent of the assessment proceedings and the considerations that arise in penalty proceedings are different from those in assessment proceedings. The orders passed by the authorities concerned at various stages of assessment proceedings are no doubt relevant in penalty proceedings but the probative value of such orders cannot be overstressed. Howsoever good the findings recorded in the assessment proceedings might be they cannot be treated as last or final word and conclusive in so far as the penalty proceedings are concerned. In order to declare an assessee guilty of concealing the particulars of his income or furnishing inaccurate particulars of such income the matter shall have to be looked into and examined afresh and it is not to be guided solely by the finding given on the quantum side as seems to have been done by the learned CIT(A) in the instant case. The endeavours of an assessee to show that the declaration of incorrect income by him in the return had not resulted from any fraud or gross or wilful neglect on his part cannot be thwarted on the ground that he had either not taken such a plea in the assessment proceedings or if taken, that had been found unfounded, baseless or even false. Findings recorded in quantum proceedings are not to operate as res judicata in penalty proceedings.
The plea advanced by the assessee and material relied upon by him in penalty proceedings shall have to be examined with a view to see whether such a plea and material can reasonably be declared as sufficient to discharge the burden of the assessee under the Explanation. We need not stress that findings on that point shall have to be recorded on the basis of preponderance of probabilities as in civil matters and not on the standard of proof beyond doubt, as in criminal proceeding's. In the present case we find that the appellant had throughout been asserting two vital facts, vis. (1) that the moneys invested in the fixed deposits did. in fact belong to certain females of the family, and (2) that it all had come to his knowledge after the death of the deceased. This conduct of the appellant was strengthened by the fact that at the very first hearing he had not only disclosed all the relevant facts by his letter dated 15th February, 1978 but had also placed all the relevant material in his possession in that behalf before the ITO. On the material placed by him, at the most, his explanation to the effect that the moneys invested in the fixed deposits by the deceased had been procured from sale proceeds of the ornaments belonging to the ladies could have been rejected and that seems to have been done in the present case. For, it is highly doubtful whether the explanation offered in the facts and circumstances narrated above could have been legitimately dismissed as being false altogether.
16. At this stage we would also like to point out at another point and which is to the effect that after the death of the deceased the amount invested in the fixed deposits was distributed amongst the four females as per will of the deceased dated 2-7-1975. Up to the stage of Tribunal though the genuineness of this document as a will of the deceased was doubted yet at no stage of the proceedings it could be held that it did not contain the signature of the deceased. Even the Tribunal held that the document had been reported by the ITO to be having the signature of the deceased. This document was rejected as being a will on the ground that the requirement of attestation by two witnesses had not been fulfilled and the circumstances attending on the execution of this document by the deceased were highly doubtful. Be that as it may it is an established fact that this document was having the signatures of the deceased. No doubt this document had failed to be effective as a will of the deceased but it cannot be rejected as a document containing the statement of the deceased. Once the signatures of the deceased on this document are accepted it partakes of the character of the statement of the deceased. It may be noted that this document contained admission of the deceased with regard to the ownership of the moneys in the fixed deposits against his own interest. Further, it may be noted that the investments made in the fixed deposits had been stated to be the property belonging to the females of the family but no member of the said family had ever objected to the distribution of that wealth in that way. It cannot be lost sight of that by the distribution of the moneys in the fixed deposits the families of two of the male members out of five brothers were going to be benefited. None of the other three brothers ever appear to have raised any objection to the distribution of a property left by their father. This again indicates that assertion being advanced by the appellant was not without any basis.
17. Then again it cannot also be lost sight of that at one stage of the proceedings the tax authorities themselves had upheld the contention of the appellant that the distribution of the moneys in the fixed deposits in question had resulted in bringing capital gain to the ladies of the family for which they had been taxed accordingly. No doubt this position was unsettled by the Tribunal in appeal yet it leaves much for consideration whether such circumstances would necessarily go to prove mala fides on the part of the appellant.
18. Thus having considered the material on record, the conduct of the appellant exhibited in the course of assessment proceedings as also in the course of penalty proceedings, the treatment given to the amount in question by the department at several stages of proceedings in the case of several persons we are clearly of the opinion that the appellant in the present case had fully proved that there had been no fraud or gross or wilful neglect on his part in not disclosing the correct income of the deceased in the return filed by him. We need not stress again that had the appellant intended to conceal the particulars of the income of the deceased he would not have placed all the relevant facts supported by relevant documents before the ITO on the very first day of hearing.
We would further like to stress that in the present case it was the legal representative of the deceased who had been required to file the return of the deceased and on evidence we hold that he was guilty of no fraud or gross or wilful neglect in returning the income of the deceased in the manner he did in the course of the assessment proceedings. We are therefore clearly of the opinion that it was not at all a fit case for levy of penalty under Section. 271(1)(c) of the Act upon the appellant for either concealment of the particulars of income of the deceased-assessee or for furnishing inaccurate particulars of such income.
19. The cases relied upon by the learned representatives of the parties call for no serious comments. Suffice it to say that in our approach to the case on hand we have proceeded on the footing of the applicability of Explanation to Section. 271(1)(c) to the facts and circumstances of the case. We have therefore proceeded on the ground that it was for the appellant to prove that the incorrect income had not resulted from any fraud, gross or wilful neglect on his part. In our opinion the appellant had fully discharged that burden by leading positive and affirmative evidence with regard to his conduct. For these reasons therefore we see no necessity of elaborately discussing the legal principles enunciated in the cases relied upon by the parties as we have kept them in our mind while appreciating the evidence and material in the present case.
20. In the result we set aside the order under appeal and cancel the penalty levied upon the appellant under Section. 271(1)(c) of the Act read with Explanation thereto. The appeal is accordingly allowed.