9911796707
TMI Blog1982 (6) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of Rs. 11,95,716 as advance-tax in three equal instalments. The assessee did not pay the tax as demanded. It filed three estimates of its own on 14th June, 1974, 7th Sept., 1974 and 11th December, 1974, showing the tax payable at Rs. 8,66,184, Rs. 9,81,684 and Rs. 11,76,077 respectively. Thus, according to the latest estimates filed by the assessee, the tax payable by it was shown at Rs. 11,76,077. Subsequently, the assessee filed a return on 16th July, 1975 declaring an income of Rs. 30,86,940. This return was revised on 14th December, 1976 showing an income of Rs. 30,87,780. The assessment was completed on 2nd Aug., 1977 on a total income of Rs. 42,58,070. As per the regular assessment the tax payable by the assessee worked o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee knew the estimate filed by it to be untrue. Hence, he held that the assessee was liable to penalty u/s 273(a). 6. Coming to the quantum of penalty, the CIT (Appeals) found that the minimum penalty imposable worked out to Rs. 1,964 whereas the ITO had imposed a penalty of Rs. 48,988. He observed that the assessee also defaulted u/s 212(3A) for which it was liable for penalty u/s 273(c). Hence the held that the assessee was liable to a higher penalty than the minimum laid down u/sub-cl(2) of s. 273(I). However, he found that some reductions were given by the Tribunal in the quantum appeal and so, he directed the ITO to levy a minimum penalty of ten per cent of the difference between 75 per cent of the tax finally assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 099, which showed the fluctating nature of the metal market. 8. Shri B.K. Gupta, ld. Rep. for the Department, on the other hand, supported the order of the CIT (Appeals). He stated that the Act itself gives a margin of 25 per cent, and it is only if the difference between the estimated income and the assessed income exceeds that margin of 25 per cent, then the provisions of s. 273(a) could be made applicable. Regarding the explanation given by the assessee about the low estimate filed on 11th December, 1974, he stated that the same has been found to be untenable by the CIT (Appeals), inasmuch as there were no fluctuations in the price of the main raw materials purchased by the assessee. He urged that the law imposes an obligation on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its business, and if so, what is its magnitude, lies within the special knowledge of the assessee. Hence, it was the assessee alone who can honestly use those facts, to discharge its statutory obligation, namely, to estimate its correct income reasonably. Further the Act takes into account the fact that the assessee was merely making an estimate and so allows a margin of error 25 percent of the amount estimated. If the difference exceeds this statutory limit, then it was for the assessee to explain as to the basis on which he arrived at the estimated figures, so that it could be seen as to whether the said estimate was honestly made on the basis of the available date. In this case, the assessee has not revealed at any state the basis on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and V. Damodaran vs. CIT (1974) 96 ITR 335 (Ker). In the instant case, the assessee has not explained the wide disparity. What is more, the explanation given before the CIT (Appeals) was found to be untrue, and that finding of the CIT (Appeals) has not been rebutted. The fact that the income of the assessee went down in the subsequent year is not relevant to the point of issue in this appeal. Hence, we come to the conclusion that the assessee was liable for penalty u/s 273(a). 11. We have considered the decision in the case of Kundanlal, which lay down the well known proposition that the penalty u/s 273 can be imposed only for deliberately furnishing an untrue estimate of the advance-tax but, as stated earlier, we have found that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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