9911796707
TMI Blog1984 (1) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... It was under these circumstances of assessee firm itself filed revised return for asst. yrs. 1976-77 and 1978-79. The revised return for asst. yr. 1977-78 was filed on 15th June, 1979 disclosing an income of Rs. 4,06,569. Prior to the filing of the revise return, there was a posting of the case once under s. 143(2) of the Act when the assessee's representative had asked for adjournment. This adjournment was granted. In other words, the revised return was filed before the assessment for this year was taken up though it had been posted once. It is however of ITO's case that the finding which he had made in respect of the asst. yr. 1976-77 which compelled the assessee to file a revised return on 7th Feb., 1979 had also similarly compelled it t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yr. 1977-78 took this altered stock position into consideration, the ITO was of the view that this proved the admitted stock discrepancy and justified the penalty. The difference in both these returns was Rs. 2,85,921 and the penalty levied is equal to the same. The first appellate authority confirmed the penalty on the ground that the assessee did not furnish its photostate copies of the statements of commission from the agents for the period and copies of suspense accounts of the agents in its book of account. It is stated that the information was not furnished while according to the assessee he did not have sufficient opportunity because there was strike in assessee's factory at the relevant time and that at any rate the various accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losing stock with consignees were duly accounted in assessee's books. It was, therefore, contended that the effect of the wrong system of accounting followed by the assessee was that the tax on the income was getting postponed. It was contended that there was absolutely no intention to avoid the tax. The assessee rectified the wrong system the moment it was brought to its notice. Authorities were cited for the proposition that in cases where bona fide mistake have been made, there cannot be a case for penalty. It was also contended that the revised return would protect the assessee. The ld. departmental representative, on the other hand, also cited authorities for the proposition that the revised return, by itself cannot offer an immunity t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration. We will however, not say anything about the eligibility of penalty for asst. yr. 1976-77 as the matter is not before us not and is stated to be still pending. The penalty for that year would depend upon the fact for that year. Each assessment being separate, the question penalty for each year had to be considered with reference to the relevant facts for that year. It may be that the penalty is exigible for an earlier year, but still it is not edible for this year on account of different facts. Even assuming in favour of revenue that there was concealment inferable from the wrong method of accounting assumed to be consciously adapted by the assessee with a view to avoid rightful tax liability, we cannot justify penalty if the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justify penalty. Even. otherwise, in the facts of the assessee's case, the ITO has not brought home concealment on the part of t he assessee. There is a mere reference to the conduct of the assessee in respect of the previous assessment It is not shown that the mistaken system of accounting followed by the assessee was not consistently followed. The assessee's main argument that though the stock was not disclosed, the subsequent sales were disclosed and that therefore, there was not intention to conceal the stock has not been met. An attempt was made on the part of the first appellant authority that the assessee has not furnished further evidence in this regard. Apart from the fact that the question of penalty has to be considered in the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty "if such an explanation is bona fide and all the material facts relating to the same and material to the computation of total income have been disclosed". It is clear that the proviso to the Explanation would come to the aid of a tax payer where all the materials are ultimately placed before the ITO and the Explanation is considered bona fide. In the facts and circumstances of the assessee's case, the application of the Explanation to the assessee cannot lead to a different conclusion. All the facts have been placed by the assessee. In fact, the inference drawn by the assessee in respect of the complete facts placed before the ITO prior toe he assessment have been accepted by the ITO as well by the acceptance of the rectified return. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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