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TMI Blog1975 (7) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts from his place of business. The petitioner did not file any return in form A-1 for the assessment year 1965-66 in spite of the fact that his accounts were summoned from the beginning of the year. As he did not produce the accounts in spite of repeated summons, a notice was issued on 7th September, 1966, proposing to assess the petitioner on a taxable turnover of Rs. 7,27,501.14 on the basis of the anamath accounts recovered. Thereafter the petitioner filed a return on 19th September, 1966, declaring a total and taxable turnover of Rs. 3,42,174.33. He also produced his accounts on 29th September, 1966. Finding that there were a number of defects in the accounts produced, the assessing officer made a best judgment assessment making so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of the relevant provision it is necessary to extract the entire section 12. That section, as it stood in the relevant assessment year 1965-66, reads as follows: "12. Procedure to be followed by the assessing authority.-(1) The assessment of a dealer shall be on the basis of the prescribed return relating to his turnover submitted in the prescribed manner within the prescribed period. (2) If no return is submitted by the dealer under sub-section (1) within the prescribed period, or if the return submitted by him appears to the assessing authority to be incomplete or incorrect the assessing authority shall, after making such enquiry as it may consider necessary, assess the dealer to the best of its judgment: Provided that befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also incomplete and incorrect. Sub-section (3) of section 12 provides for penalty in all the three circumstances which enable the assessing authority to make a best of judgment assessment. The first part of that sub-section deals with a case where the return filed by the assessee either in time or out of time was not accepted by the assessing authority and, in such a case, he is authorised to levy a penalty not exceeding one and a half times the amount of tax due on the turnover that was "not disclosed" and the latter half confers a jurisdiction on the assessing authority to levy a penalty when he makes a best of judgment assessment in the case of "failure to submit a return". The learned counsel for the assessee contends that in this ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, of the view that in a case where a return was filed though belatedly and that return was not accepted on the ground that it was incomplete or incorrect and a best judgment assessment was made, penalty could be levied only with reference to the amount of tax due on the turnover that was not disclosed by the dealer in his return and not at one and a half times the tax assessed. Since even the Appellate Assistant Commissioner levied the penalty only with reference to the amount of turnover returned by the assessee, the orders of all the authorities including that of the Tribunal are liable to be set aside in so far as they relate to penalty. The turnover not disclosed by the dealer in his account has now been determined by the Tribunal an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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