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TMI Blog1979 (10) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return. When the assessee's accounts were checked, the turnover was found to be Rs. 6,35,907.95, which included the sum of Rs. 97,547.23. The assessing officer found that there were other suppressions and irregularities and he therefore rejected the returns as well as the accounts. He took the turnover as per the books and added Rs. 31,795.40, which represented 5 per cent of the turnover, as per the accounts, for "probable suppression" and made a best judgment assessment under section 12(2) of the Act. He levied also a penalty of Rs. 7,416 under section 12(3) for the assessee's failure to disclose the turnover of Rs. 97,547.23 in the annual return. At the time of the inspection, there were certain sheets indicating suppression of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pportunity, it held that this was a clear case of suppression where penalty under section 12(3) as well as under section 16(2) should have been sustained. The order of the Assistant Commissioner was therefore cancelled and the penalty levied by the assessing authority was restored. It is this order which has been brought on appeal to this Court. We shall deal with the two penalties separately as they have been levied under different provisions. Section 12(3) of the Act provided, before its amendment by Act 31 of 1972, that when making an assessment under sub-section (2), the assessing authority may also direct the dealer to pay, in addition to the tax assessed, a penalty not exceeding one and a half times the amount of tax due on the turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistant Commissioner considered that the failure would constitute only a technical offence and levied a nominal penalty of Rs. 500. The Board, in exercise of its powers of revision, set aside the order of the Appellate Assistant Commissioner and restored that of the assessing authority. This Court held at page 183: "Where account books are accepted along with the other records, obviously, there can be no room or justification for applying best judgment. Best judgment is applied to find out the correct turnover on estimate and estimate will arise only if the accounts are not accepted, either in whole or in part. Even then best judgment, we may observe in passing, cannot be a wild guess, but a reasonable and justifiable guess based on som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the levy of penalty is not called for. No doubt, there is another sum of Rs. 31,795.40 added in the assessment. However, the authorities did not consider that addition as a justification for levy of penalty. We do not think it proper to go into that item for considering the question of penalty. Coming to the levy of penalty under section 16, the position is as follows. The assessee did not include the relevant amount either in the return for 1963-64 or for 1964-65. It is true that when the matter was pending on appeal before the Tribunal for the assessment year 1963-64, it was stated by the assessee that this amount was liable to be assessed only in 1964-65 as the dates of the transactions themselves showed. It was only on this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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