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TMI Blog1991 (7) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment years 1974-75 and 1975-76 on the basis of an inspection of the place of business by the Central Intelligence Wing Officers. During the inspection, certain records were seized and they revealed large remittances to the bank, and the assessee was called upon to explain those remittances as the assessee did not maintain any books of account whatsoever relating to its trading activities. The assessee did not produce the books of account despite several reminders from the department. The assessing authority, finding that no return had been filed and no account had been produced, was left with no option but to take recourse to best of judgment assessment on the basis of the materials seized during the inspection and the extracts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee-petitioner questioned the best of judgment assessment as well as the levy of penalty. Learned counsel argued that though the assessee had not filed the returns and had also not produced the accounts despite giving of opportunities, yet the reason for not filing the returns or producing the accounts was the detention of Thiru T. Kadiresan, the managing partner of the assessee-firm under the Maintenance of Internal Security Act (hereinafter referred to as "MISA"). This plea appears to us to be an argument of despair. On the assessee's own showing before the appellate authority as well as the Tribunal, Thiru Kadiresan was shown to have been detained under MISA on February 8, 1976 and released in July 1976. There was no rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to establish before the authorities below that it was not liable to be assessed, the order of assessment made by the assessing authority and upheld by the appellate authority as well as the Tribunal does not call for any interference in exercise of our revisional jurisdiction, as we do not find the same to suffer from any error whatsoever. On facts, findings have been recorded based on the bank extracts and assessments have been made on the basis thereof. We do not, therefore, find any force in the grievance made by the learned counsel for the petitioner in that behalf. 4.. Learned counsel for the assessee then argued that the levy of penalty under section 12(3) of the Act was not justified. He submitted that though the assessing author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the question whether grounds exist for the imposition of such penalty. In order that penalty may be imposed, it must be possible first to come to the conclusion that there was actually turnover and further that that turnover was not disclosed. The mere fact of a best judgment assessment, particularly when the assessment is based on the inference flowing from the inability of the assessee to establish the case pleaded by him, will not be sufficient for the purpose of imposition of penalty, for the degree of proof required for the imposition of penalty is quite different from and is of a much higher order than that required for the purpose of making a best judgment assessment." 7.. The judgment of the Full Bench undoubtedly supports ..... X X X X Extracts X X X X X X X X Extracts X X X X
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