9911796707
TMI Blog1983 (12) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Act, 1961 ('the Act') on 14-6-1978. Since the assessed income was Rs. 3,01,540, the ITO initiated penalty proceedings under section 274/273(2)(c) of the Act. It was submitted that because of accumulated losses and unabsorbed allowances amounting to Rs. 28,897 and because the accounts of the company were required to be audited, they were not available till 1-9-1979, etc., the revised estimate could not be filed. Rejecting the submissions of the assessee the ITO levied penalty of Rs. 15,760 by observing that it is statutory liability of the assessee to file the estimate/statement of its total income if the current income is likely to exceed the sum specified under section 208(2) of the Act. Further the reasons given by the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove its case. 5. On behalf of the assessee, initially the submissions were made on the very basis of applicability of section 209A(4). Section 209A having been introduced in June 1978 and the changes not having been properly appreciated the assessee could not be charged with the default. Besides, under section 209 the computation of advance tax was based on latest assessment which in this case was a loss. Even the alternative requirement in respect of self-assessment tax being higher in respect of years subsequent to the latest year for which the assessment is completed was not applicable to the facts of the case of the assessee. Therefore, what was required to be seen as per the position on 14-6-1978 according to which the statement wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee in Form No. 28A as per rule 38A of the Income-tax Rules, 1962, on the basis of which regular assessment had been made for the assessment year 1977-78 on 9-12-1977 was the correct estimate. In this connection, it will be useful to refer the case of CIT v. Ranchhoddas Karsondas [1959] 36 ITR 569 (SC). While dealing with the argument that voluntary return showing below taxable limit was not valid return, their Lordships stated that "it was difficult to understand how the existence of return could be ignored once it had been filed. No doubt it is futile for a person not liable to tax to rush with a return, but the return in law is not a mere scrap of paper. It is a return, such as the assessee considers represents his true inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired, as first step, is to take the amount of advance tax payable in this case as per Form No. 28A filed on 14-6-1978 as Rs. nil. Then on second step, find the tax payable as per the estimated current income on or before 15-12-1978. On third step, make comparison as to whether the amount of the advance tax payable as per second step is higher by 33 1/3 per cent of the amount payable as per the first step ; if so, then take the figure arrived on second step. In this case, the amount payable in first step was nil. Then, suppose making computation as per second step, if the tax payable on estimated current income came to Rs. 2 lakhs, then certainly the resultant figures in the third step would be Rs. 2 lakhs because what you are required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel, it appears that the fact of the case carry some healthy points in favour of the assessee. What is required for the levy of the penalty is the presence of guilty mind and in this case the onus of proving the guilty mind existed at the relevant time is upon the revenue and the same has not been fully discharged. The revenue has also not brought to our notice any facts as to whether the assessee is habitual defaulter in complying with the requirements of law. For non-filing of the revised estimate and non-payment of advance tax recoupment in respect of loss of revenue must have been already made under the applicable provision embodied in Chapter XVII of the Act. Therefore, it is required to be proved by the revenue beyond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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