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TMI Blog1967 (7) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... eable at seven per cent., Rs. 10,237.41 at six per cent. and Rs. 3,60,643.73 at five per cent. During the assessment proceedings it was found that the assessee had not included in his monthly returns in Form A-2 three items of turnover: (1) a sum of Rs. 1,95,311.21 relating to delivery charges the assessee had paid to certain Calcutta dealers from whom he had made purchases of cars, trucks, scooters etc., (2) Rs. 2,21,247.97 (the figure given in the assessment order, as we are told, is a mistake) which pertained to first sales of motor parts, and (3) Rs. 1,56,539.25 which represented the aggregate proceeds of sales of firewood. The first two items are each chargeable at seven per cent. and at the stage of the first sale in the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner noted that there was no dispute about the fact that the assessee failed to disclose the taxable turnovers on the three items in their monthly returns, but he felt that the failure on the part of the assessee was under the bonafide impression that it would be sufficient if correct figures were furnished at the time of the final assessment. On this view, he thought that the failure would constitute but a technical offence and a nominal penalty of Rs. 500 would meet the ends of the case. The Board of Revenue in exercise of its powers under section 34 set aside the order of the Appellate Assistant Commissioner and, as we said, restored that of the assessing authority. In doing so, it practically adopted the reasoning of the assessing auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier years. It seems to us, however, that there is some substance in the other line of argument for the assessee. Its effect is to confine the power to levy penalty under section 12(3) to a limited class of cases strictly falling within the purview of sub-section (2) of section 12. The power to levy penalty can be exercised only if the assessment falls within the purview of section 12(2). In other words, it is not sufficient to attract sub-section (3) that no return has been filed, or if one is filed, it is incomplete or incorrect. After making enquiry as the assessing authority may consider necessary he should, as a result, find reason to apply best judgment in determining the correct turnover. These requirements appear to be implicit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Revenue to arrive at the correct turnover by best judgment and, in fact, it was arrived at on that basis. This item will literally, therefore, fall within the ambit of sub-section (2) and it would follow therefrom that ipso jure the jurisdiction to levy penalty under sub-section (3) becomes available. The whole of the assessment as we read section 12, need not necessarily be only under sub-section (2) of that section. The assessment may be partly under sub-section (1) and partly under sub-section (2). In any case, where part of the assessment is not based on estimate or best judgment, it is clearly not within the purview of sub-section (2) and, therefore, in respect of such part of the assessment, there will be a bar to levy penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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