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TMI Blog1986 (9) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is Doctor Kedarnath Gupta a Vaid at Mainpuri (U.P.). He had filed his income-tax return for the assessment year in question on14-5-1984declaring an income of Rs. 1,21,150 on which the assessment was completed on31-8-1984. A raid took place at the premises of the assessee on3-2-1984as a result of which cash, fixed deposit receipts and bank deposits as well as gold and silver ornaments were seized. In pursuance of the settlement petition dated19-4-1984given by the assessee before the learned Commissioner,Agra, the CRP Agra passed an order of settlement on1-5-1984. The following table would conveniently express the recoveries made and the amounts accepted as the assessee's income as a result of the said settlement : ------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his real income. The further contention raised by the assessee was that a sum of Rs. 61,000 having been seized by the department was already lying with it and, therefore, no penalties could be imposed on the assessee. These explanations were not accepted by the ITO who imposed the above penalties which represented the minimum amounts of penalties imposable under the respective provisions referred to above. 3. In appeal, the learned AAC held that the assessee was prevented by a reasonable cause from filing the estimate of advance tax and from making the compulsory deposit. Accordingly, he cancelled the penalties. 4. In the appeals before us Shri D.K. Sharma, the learned departmental representative strongly supported the penalty orders p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also submitted that on 15-9-1983, the date when the advance tax estimated was due to be filed, the assessee could not expect that the raid would be made on the assessee's premises and that the income would be as declared by him at Rs. 1,21,150 on 14-5-1984. He submitted that there was a bonafide belief in the mind of the assessee that his income continued to be below the taxable limit and, therefore, there was neither any obligation to file the estimate of advance tax nor to make any compulsory deposit under section 5. He also placed reliance on the following decisions in CIT v. Co-operative Cane Development Union Ltd. [1975] 101 ITR 368 (All.), CIT v. S.B. Electric Mart (P.) Ltd. [1981] 128 ITR 276 (Cal.) and Southern Publications (P.) L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bona fide belief of the assessee that he was not liable to pay advance tax was a sufficient cause. In the case of Gujarat Travancore Agency it was held that the department was not obliged to establish mens rea in case of the default under section 271(1)(a) of the Act. To the same effect was the Full Bench decision of the Hon'ble Andhra Pradesh High Court in the case of Dargapandarinath Tuljayya Co. The case of S.B. Electric Mart (P.) Ltd. was a case under section 273(1)(a) and since the estimate of advance tax was filed after the expiry of the accounting period it was held that the assessee may or may not have full picture of the income earned. This decision is, therefore, not very relevant. In the case of H.H. Maharani Sharmisthabai H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces that the assessee made the petition for settlement on19-4-1984offering income mentioned above and which resulted in the order of settlement made on1-5-1984passed by the learned Commissioner. In the background of all this, it could not be said by the assessee that all this income was amassed only after 15-9-1983 and that on 15-9-1983 when the estimate of advance tax was due, he could not estimate his income. The theory of reasonable cause and bonafide belief is too tall to be accepted in the factual background mentioned above. We are, therefore, clearly of the opinion on the facts and in the circumstances of the present case that the learned AAC was in error when he accepted that there was reasonable cause for the assessee's default. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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