9911796707
TMI Blog1964 (8) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st March, 1954. The assessee has several sources of income; one of them is a bus business. In September, 1953, the Income-tax Officer issued a demand under section 18A(1) of the Act, basing that demand on the last completed assessment, which was that of the assessment year 1948-49. Under sub-section (2) the assessee has the liberty of estimating his income and of paying advance tax in accordance with such estimate. In the estimate so submitted by him, he gave the estimated income as ₹ 25,000, but the total income as furnished by him came to ₹ 35,515. On assessment, however, his income was fixed at ₹ 90,759. The Income-tax Officer thereafter proceeded to apply section 18A(9) of the Act. This sub-section provides that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). This explanation was not accepted, principally for the reason that the assessee did not produce any basis for the estimate which he had made. Accordingly, the penalty was imposed. Even in the appeal before the Appellate Assistant Commissioner, no figures to justify the computation of the estimate made by the assessee were made available. The Appellate Assistant Commissioner upheld the imposition of penalty. In the further appeal to the Tribunal, the contentions again did not carry conviction to that appellate authority. The appellate authority observed that the assessee did not object to the addition of about ₹ 44,000 to the returned income. It may be stated here that the assessment order itself was not questioned by way of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real question is whether the assessee knew or had reason to believe that the estimate submitted by him was untrue at the time when he made it. Since this related to the state of account at the point of time when he submitted the estimate and he had business accounts before him when he made the estimate, if it could be shown that he based the estimate only on the trend of income as disclosed by the business accounts, notwithstanding the variation between his estimate and the final assessed figure, it could not be said that he had any reason to believe his estimate to be untrue. The facts of that case were that an assessee made an estimate of his income at a particular figure which was certainly lower than the figure arrived at the regular as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this regard was not canvassed in appeal, and the finding of the Income-tax Officer that the sum of ₹ 25,000 added on this head did represent the income of the assessment year cannot be disputed at this stage. But the more important question is whether the assessee is not bound in a proceeding under section 18A(9), read with section 28, to satisfy the Income-tax Officer that he had reasonable belief in computing his income at the figure of his estimate. The disparity between the estimate and the finally assessed figure is so great that the assessee's mere statement that he thought that his estimate represented the probable income and that it was made honestly cannot be accepted as it stands. As was pointed out in the case refe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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