1977 (1) TMI 74 - AT - Income Tax

Summary

Issues:
1. Assessment for the years 1972-73 and 1973-74.
2. Validity of penalty imposed under Section 12(3) of the Act.
3. Consideration of returns filed by the appellant.
4. Application of best judgment assessment by the Assessing Officer.
5. Independence of mind in determining taxable turnovers.
6. Direction from the Joint Commercial Tax Officer for assessment and penalty.

Detailed Analysis:
1. The judgment pertains to the assessment of the appellant for the years 1972-73 and 1973-74 based on recovered account books and statements. The assessing officer determined taxable turnovers for the appellant, considering purchases and sales of ducks, fowls, and eggs. The appellant disputed the assessments and penalties imposed under Section 12(3) of the Act.

2. The appellant raised objections regarding the meaning of certain entries in the account books and denied engaging in the transactions mentioned. Additionally, the appellant argued that the returns filed by him were not considered during the assessment process. The first appellate authority reduced the penalties but upheld the assessments.

3. The appellant further contested the assessments through appeals, challenging the taxable turnovers determined and penalties imposed. The appellant emphasized that the returns filed by him were crucial evidence that had not been taken into account during the assessment process.

4. The Tribunal acknowledged the appellant's contention that the returns filed before the final assessment order must be considered by the assessing officer. Citing the case of Bata Shoe Company Private Limited vs. The Joint Commercial Tax Officer, the Tribunal emphasized that the assessing officer cannot ignore belatedly filed returns and must consider them in making assessments.

5. The Tribunal found that the assessing officer did not independently evaluate the objections raised by the appellant in response to the pre-assessment notice. The orders of assessment and penalties were based on directions from a superior officer, indicating a lack of independent assessment by the assessing officer.

6. Consequently, the Tribunal set aside the assessments and penalties for both years, directing the matter to be reconsidered by the assessing officer. The Tribunal emphasized the importance of considering the returns filed by the appellant and evaluating his objections before determining taxable turnovers. The appellant was granted the opportunity to present additional evidence and materials to support his objections during the reassessment process.