9911796707
TMI Blog1960 (4) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... Calendar year Assessment year Exports Commission added Rs. 1948 1949-50 2,00,000 (Approx.) 7,569 1949 1950-51 4,88,086 18,527 1950 I95I-52 7,50,000 (Approx.) 23,082 In its return for the assessment year 1949-50 the assessee did not include any profit of the Bangkok branch but made a declaration on the return filed by it as under: The books of account of the Bangkok branch are not available at present. I have no objection in case the profits earned there are estimated subject to action under section 34 or 35 on production of statement of accounts. The Income-tax Officer completed the assessment estimating the profits of the branch at 5% on the prices shown in the invoices. For the assessment year 1950-1951 (C.Y. 1949) there was no reference to the Bangkok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it and loss accounts and balance sheet for C.Y. 1950 and C.Y. 1951 together for our branch there. The Income-tax Officer thereupon estimated the sales of calendar year 1950 at ₹ 7 lakhs and arrived at the figure of ₹ 37,500 as estimated profits. At the same time, he also issued a notice under section 28(3) dated 31st January, 1952, requiring the assessee to show cause why a penalty under section 28(1)(c) for concealment of particulars should not be levied. In respect of the assessment year 1952-53 (C.Y. 1951) the assessee firm adopted the same attitude but the Income-tax Officer persisted in production of the profit and loss account and books of the company which were eventually produced by the assessee firm and showed the following eloquent position: Calendar year Assessment year Turnover Net Profit Rs Rs 1949 1950-51 8,23,050 59,232 1950 1951-52 8,21,935 1,25,520 W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 20,000 and dismissed the other appeal with the result that the order levying the penalty of ₹ 68,501 was upheld. The material and relevant part of the order of the Tribunal is as under: Now coming to the two penalties imposed, it is indeed difficult to understand the action of the department, in splitting up one offence into two proceedings. So far as the levy on the basis of the 23(3) assessment is concerned, it appears to have no basis as till that stage, the department had not succeeded in establishing and bringing home any guilt. It was still in the region of estimate. Omission to refer to the Bangkok business as the only basis for such a levy is not only technical but open to serious argument in the unsatisfactory manner the assessment had been completed in the past. The levy of ₹ 20,000 therefore has to be remitted in full. The levy of ₹ 68,501 is entirely different. With the definite knowledge that the Income-tax Officer had obtained that the profit for the year was ₹ 1,25,520, he has clearly proved guilt of concealment against the assessee; it was not declared by the assessee nor was a reference thereto made in the return with a requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat was obviously on the footing that when the assessment order was made on 31st January, 1952, and when the first penalty notice was issued on the same day, there was no material whatever before the Income-tax Officer even indicative of any concealment of any particulars. The Tribunal found in both the appeals that the material on record was sufficient to establish concealment of particulars from the original return. It accepted the contention relating to the penalty of ₹ 20,000 on grounds stated by it in its order, a part of which we have set out above. The Tribunal, however, agreed that the position regarding the levy of ₹ 68,501 was entirely different, as the Income-tax Officer had definite knowledge when he dealt with the second penalty notice that there was proof of concealment of the particulars relating to the profits at Bangkok. The argument urged before the Tribunal in respect of the penalty of ₹ 68,501 was that by the imposition of the first penalty, the assessee's liability under section 28 became discharged and therefore the second penalty imposed on the assessee was void and there was no question of considering any further that aspect of the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the Income-tax Officer was dealing with the assessment year 1952-53 (C.Y. 1951) that the books of account of the Bangkok business were produced before him and it was only when that evidence was before him that he found that the net profits for the assessment year 1951-52 (C. Y. 1950) was ₹ 1,25,520. It was only at that stage that he came to know that the assessee had concealed the particulars of his income and deliberately furnished inaccurate particulars of his income at the time of the original assessment which had been made only on an estimate on such date as was supplied by the assessee, It has been strenuously urged before us by Mr. Kolah that the Income-tax Officer had knowledge of all the relevant facts and particularly those gathered from the books of account of the Bangkok business and the statement of profits and losses which were produced before him on 17th August, 1953. This, it has been said, was before the order levying the first penalty of ₹ 20,000 was passed. The argument has run that it was on identical facts that the second penalty was imposed on the assessee. The argument in our opinion is ill-founded. The crucial date is not 22nd January, 1954 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial data gathered from the account books of the Bangkok business which had been produced before him in the course of the assessment proceedings for the year 1952-53 (C.Y. 1951). It is on these lines that Mr. Joshi, learned counsel for the revenue, has presented his arguments before us and, in our opinion, there is considerable force in the same. Mr. Joshi has also stressed that the original assessment was only on the basis of an estimate. We agree that this is a material factor. For all these reasons it is impossible to accede to Mr. Kolah's contention that there was no new fact or new data on which the second penalty could have been imposed. We have already pointed out that for the present purpose it is not the date on which the order imposing the first penalty was passed that is to be regarded but the material date is the date on which the assessment order was made and the first penalty notice was issued. The facts which we have already summarised clearly go to establish that the basis for the two notices was not the same. We may point out that the quantum of any penalty to be imposed under section 28 has to be in a sum not exceeding 1 times the amount of income-tax and su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
