9911796707
TMI Blog1990 (10) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... ld following the decision in Kathiresan Yarn Stores v. State of Tamil Nadu [1978] 42 STC 121 (Mad.) [FB] that the penalty is not sustainable. The State has challenged the order with respect to penalty only before us. 2.. In Kathiresan Yarn Stores v. State of Tamil Nadu [1978] 42 STC 121 (Mad.) [FB] (the decision relied upon by the Tribunal), the provision of section 12(3) of the Act has been considered and it is stated, "An estimate of turnover can be made under various circumstances. More often an estimate or best judgment assessment, whether it be for the purpose of imposing sales tax or for the purpose of imposing income-tax under the Income-tax Act, can be based on nothing more than an honest guess. This is permissible in law and no o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particulars thereof, in order to attract section 271(1)(c) of the Income-tax Act, 1961. Though the word 'concealed' is not used in section 12(3), nor the words 'furnished inaccurate particulars thereof, it would not materially alter the situation. Penalty is for not disclosing. In order that it may be said that there was nondisclosure, it has first to be found that there was turnover or income to disclose. If the existence of the turnover or income is based on the fact that the assessee has not been able to establish the case that he pleaded, that by itself would not prove the positive that there was income or turnover. But the inability to prove the case pleaded would be sufficient to assess the dealer or the person liable to pay tax. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as said, "The assessing officer in his estimate has taken into account the deficit stock on February 15, 1977. The Appellate Assistant Commissioner however proceeded to consider the suppression of sales revealed by stock discrepancies on February 2, 1977. The pre-assessment notice does not refer to the stock discrepancy on February 2, 1977 and of any proposal to estimate the turnover on such discrepancy. In that circumstances, the Appellate Assistant Commissioner was in error in estimating the suppression by taking into account the stock discrepancy on February 2, 1977. It will be seen that in the computation that has been done by the Appellate Assistant Commissioner there has been an enhancement of turnover without proper notice to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary 2, 1977, involving a purchase turnover of 47 bags of oil seeds, the same has been rightly brought to tax levy under section 7-A. " It can thus be seen that the Appellate Assistant Commissioner had committed a serious error in including in his estimation certain alleged suppression of stock on February 2, 1977, as well as with respect to the purchase turnover under section 7-A of the Act. The penalty imposition was a result of inclusion of such materials also as part of the turnover of the assessee upon which he was assessed, but, according to the Tribunal, there were mistakes in it. There were two options open to the Appellate Tribunal, (1) either to set aside the order of the Appellate Assistant Commissioner and remit the case for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty should be levied only when there are actual suppressions, the scope of section 12(3) would be considerably restricted, for, every assessee will give some explanation or other to sustain his plea that there are no suppressions and merely on the basis of the explanation given, it cannot be said that section 12(3) cannot be invoked. In this case admittedly, the assessee is a dealer and slips have been found in its place of business. Its explanation that the slips belong to somebody else has not been believed and there was an estimate of suppressions by the assessing authority which has been sustained by the Tribunal." 5.. As we have already noticed, in the instant case, there was/is scope to say that even on the basis of the findings reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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