9911796707
TMI Blog1976 (12) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... see neither maintained any bill register nor any order book and there was fall in gross bill collection for that year as compared to the assessment year 1969-70. This fall had been explained by the assessee as due to competition in the market, but this contention was rejected by the Income-tax Officer. The Income-tax Officer in nutshell estimated gross receipts and deducted therefrom estimated expenditure for each of therefrom estimated expenditure for each of the assessment year to arrive at certain figure of the net income of assessee from this business which as compared to the income returned by the assessee, was substantially higher. The assessee, therefore, took the Commissioner. In quantum appeal, the total income of the assessee for the assessment year 1968-69 was reduced from Rs. 48,850.00 to Rs. 40,850.00, for the assessment year 1969-70 from Rs. 70,180.00 to Rs. 49,880.00 and for the assessment year 1970-71 from Rs. 53,530.00 to Rs. 26,904.00. 3. Before the assessments were completed by the Income-tax Officer, the assessee had filed revised returns for the various years. For the assessment year 1968-69, the first return was filed on 17th Dec., 1968 showing total income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see and the total income returned in the original returns filed for each of the assessment years under appeal was less than 80% of the total income assessed, invoked the provisions of S. 271(1)(c) Explanation holding that the case of the assessee came within the purview of the explanation, imposed the penalties noted supra. The assessee has, therefore, come up in appeal before us. 5. It was contended on behalf of the assessee that admittedly the books of accounts of the assessee were not in good shape. The assessee had, however, filed in good faith the returns of income for each of the assessment years under appeal, and as and when any mistake was detected by the assessee, which more often than not was due to the totaling assessee, filed the revised returns. All the revised returns were filed suo motu before completion of the respective assessments. This was permissible under law and the Inspecting Assistant Commissioner, therefore, proceeded on wrong basis to impose penalties upon the assessee. The penalties were not leviable at all, but even in calculating the basis for imposition of penalty, the Inspecting Assistant Commissioner had not taken into consideration the last revised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The assessee, therefore, prayed that the penalties be cancelled. However, the Representative of the assessee did not press other technical grounds taken up in appeal and wanted the case to be decided on merits. 6. The revenue, on the other hand, contended that it is a clear case falling within the ambit of the Explanation to S. 271(1)(c). The finally assessed income and the income as per original return has to be taken in this case because it was the Income-tax Officer who found that the assessee's income returned was not what the assessee had actually earned during the respective assessment years. The revised returns filed by the assessee were merely attempts to cover the default already committed. In this context the revenue brought to our notice a judgment of the Hon'ble Gauhati High Court in the case of F.C. Agarwal1. It was contended that considering the staggering differences between the original returns and the finally revised returns, made the assessee liable to the provisions of the Explanation clearly because it could not be stated that the revised returns, were merely the result of inadvertent mistakes or omission on the part of the assessee. The penalties were, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as revised on 7th Sept., 1971 to Rs. 29,280.00 and, inter alia, it appears in the original return the assessee had not added back income-tax of Rs. 1,493.00. Similarly for the assessment year 1969-70 the income declared in the original return filed on 8th Jan., 1970 was Rs. 14,547.00 and it was revised to Rs. 36,399.00 on 29th Oct., 1971. We find that the assessee had not added income-tax while computing the income declared in the original return. Again, the income-tax added back in the revised return filed on 7th July 1971 showing total income of Rs. 19,627 was Rs. 5,080.00 which, in itself, was a mistake because actual amount of income-tax to be added back was only Rs. 3,080.00 and the other sum of Rs. 2,000.00 was professional tax, excise duty and town committee taxes which were admissible to the assessee. For the last assessment year in appeal, the assessee had again made mistakes by adding different amount of partners salary as inadmissible expenditure. Thus, we find that the revised returns filed by the assessee were on account of inadvertent mistakes involving, as contended by the assessee, mistakes in drawing up the various accounts showing different figures. It is, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. 9. We have already held that the difference between the assessed income and the returned income does not arise from any fraud or any gross or wilful neglect on the part of the assessee. Even if the differences were to be examined, the facts show that it is merely due to estimate of the income of the assessee. We are, therefore, of considered opinion that the facts of the case of the assessee for all the years under appeal are such that the provision of Explanation to S. 271(1)(c) cannot be involved. The Inspecting Assistant Commissioner was, therefore, in error in levying the impugned penalties. 10. The revenue has relied upon the decision of the Hon'ble Gauhati High Court in the case of F.C. Agarwal1 but after perusal of the case, we find that was a case entirely on different facts. In that case the assessee had filed the returns for the assessment years 1963-64 and 1964-65 showing total income of Rs. 30,750.00 and 36,315.00 respectively. For the assessment year 1965-66 the income had been shown only Nil. But later on the assessee filed revised returns for the said three years showing total income of Rs. 2,74,189.00 Rs. 3,35,181.00 and Rs. 81,030.00 respectively. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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