9911796707
TMI Blog1980 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of its income u/s. 212 of the I.T. Act at Rs. 40 lakhs and the income-tax payable thereon was estimated at Rs. 5,50,000. After adjusting the amount of income-tax deductible under ss. 192 to 195 of the I.T. Act, the balance amount of tax was estimated by the appellant at Rs. 5,06,950. On December 6, 1969, the appellant filed another estimate of its income under s. 212 of the I.T. Act, estimating its income at Rs. 7 lakhs and the income-tax payable thereon was Rs. 3,85,000, after adjusting the amount of tax deductible under the provisions of ss. 192 to 195 of the I.T. Act. After the appellant had filed the said second estimate of its income, on March 18, 1970, the ITO for the first time held that import entitlement was revenue receipt in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn in Part " D " thereof as not being taxable. The ITO, in the course of the proceeding for the assessment year in question, i.e., assessment year 1970-71, issued the impugned notice under section 273(1)(a) read with s. 274 of the I.T. Act, 1961, calling upon the appellant to show cause why penalty should not be imposed on the ground that the appellant had filed an estimate of advance tax which it knew or had reason to believe the same to be untrue. Thereupon the appellant moved this court under art. 226 of the Constitution and obtained the rule nisi out of which this appeal arises. At the hearing of the rule nisi, it was contended on behalf of the appellant that import entitlement and cash receipts were not revenue receipts and, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge, the appellant was to show cause to the impugned notice issued by the ITO. In that view of the matter, the learned judge discharged the rule. Hence this appeal. We may now consider whether really there were any materials before the ITO for his prima facie satisfaction that the appellant had filed an estimate of advance tax for the assessment year in question which the appellant knew or had reason to believe to be untrue. The two materials stated to have been in existence at the time the ITO issued the show-cause notice have been pointed out by the learned judge. One of the materials is the finding of the AAC in the appeal preferred by the appellant relating to the assessment year 1965-66. The learned judge, it appears, has completely o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any material justifying the prima facie satisfaction of the ITO that the appellant knew or had reason to believe that the estimate of advance tax filed by it was not correct. In this connection, it may be pointed out that an appeal was filed by the appellant to the Income-tax Tribunal against the order of the AAC passed by him in the appeal relating to the assessment year 1965-66. Thereafter, a reference has been made to this court on the question whether import entitlements and cash receipts are revenue receipts or not. The question is a debatable one and, in the facts and circumstances of the case, we are of the view that the appellant had bona fide believed in good faith that the said two sums were not revenue receipts. It is, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd stop the proceeding by issuing appropriate writs. In our opinion, the same principles as laid down in that case will apply. In this connection, we may also refer to a decision of the Supreme Court in Cement Marketing Co. of India Ltd. v. Asst. CST [1980] 124 ITR 15 (SC). That was a case under the Sales Tax Act where it was alleged that a false return was filed by the dealer by omitting to include in the return of turnover the amount of freight included in the price of sugar in the bona fide belief that it was not taxable. The Supreme Court observed as follows (P. 19) : " If the view canvassed on behalf of the revenue were accepted, the result would be that even if the assessee raises a bona fide contention that a particular item is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
