TMI Blog1993 (8) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,49,383 vide order under section 250 dated 12-5-1987. Although the Department went in appeal against that order to the Tribunal the assessee did not challenge the order of the learned CIT(A). The Assessing Officer again issued a show-cause notice on 19-8-1988. The assessee vide its letter dated 6-9-1988 stated that since the appeal before the Tribunal was pending, the proceedings may be kept pending or alternatively an opportunity for personal hearing may be given. Accordingly the Assessing Officer issued another notice dated 9-9-1988 for giving personal hearing as desired. The case was fixed for hearing on 20-9-1988. The assessee sought adjournment for 5-10-1988 but again on that date no explanation was furnished. The Assessing Officer, therefore, proceeded to impose the penalty assuming that the assessee had nothing to say against the proposed penal action. Since the assessee had filed the estimate at nil and since after giving appeal effect the tax payable worked out to Rs. 7,04,337, the Assessing Officer held that the assessee had committed a default under section 273(2)(a) and since no reasonable cause could be explained by the assessee for furnishing the wrong estimate, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration. He submitted that as a result of this the disallowance of claim of liability to the tune of Rs. 8,49,395 was confirmed by the learned CIT (A) and admittedly the assessee did not even challenge that disallowance before the Tribunal. Shri A. S. Choudhary, learned counsel for the revenue emphasised that it could be gathered from the computation of income given by the learned Assessing Officer and the decision of the learned CIT(A) that even after completely absorbing the earlier investment allowance and depreciation, as per order under section 154 dated 19-2-1992, a copy of which has been filed by the learned counsel for the assessee, assessee's finally assessed income stood at Rs. 7,12,724 and hence there appears no basis to justify the stand of the assessee that it had any reasonable basis for estimating its income at Nil when it filed its estimate on 8-6-1982. In these circumstances he requested that penalty cancelled by the learned CIT (A) be restored. 5. The learned counsel for the assessee on the other hand vehemently emphasised that the conduct of the assessee was bona fide inasmuch as it had a huge amount of unabsorbed investment allowance for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of its income for the assessment year 1982-83, we may mention that in the first instance no copy of the assessment order for the assessment year 1982-83 has been filed before us. Secondly, even if we try to find, out from the record, the combined order of the learned CIT (A) for the assessment years 1982-83 and 1983-84 shows that the appeal for the assessment year 1982-83 was filed before the CIT(A) on 16-4-1985 and hence the assessment order for the assessment year 1982-83 could not have been completed on or before 8-6-1982 when the assessee had filed its estimate of advance tax. Another provision under which the assessee could have filed its estimate of advance tax is under section 209(1)(d)(i). This clause would apply only in cases where tax under section 140A had been paid at a higher amount than that which was estimated under section 209(1)(a) referred to earlier in this paragraph. Admittedly this clause is also not applicable. The other provisions under which estimate of advance tax could be filed are given in sub-sections (2), (3) and (5) of section 209A. The abovementioned sub-sections (2) and (3), however, apply where statement of advance tax has been sent or some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sales-tax liability debited by the assessee in its account is concerned, it could not be said that on 8-6-1982 when it filed its advance tax estimate it could not know that this liability is not relevant to the assessment year under consideration, namely, assessment year 1983-84. On the other hand, it may even suggest that after the assessee had filed its estimate of advance tax at Nil on 8-6-1982, when it realised that its profits were going sufficiently high it passed those entries in this books of account which would reduce its profits. so far as books of accounts are concerned, although they were not allowable according to principles of accountancy nor any case law on the subject. In this category we may also include assessee's claim of Rs. 9,45,617 and Rs. 20,598 which had been disallowed by the Assessing Officer and which had been upheld by the learned CIT (A) in para 10 of his order dated 25-3-1987 in the quantum appeals with the observation that these claims could not be allowed in the assessment year 1983-84 as the obligation to pay had arisen in the subsequent year. As already mentioned by us the assessee had not challenged that order of the learned CIT (A) before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 212 (for the assessment year 1966-67) was cancelled. Still, while canceling the penalty the Hon'ble Court had observed that where there is disparity and the disparity is enormous, mere self-serving statement of the assessee that he thought that his estimate represented a probable income of the year would not be sufficient to escape the liability under section 273 of the Act. He has to justify the basis of his estimate. The estimate must be an honest estimate based on the accounts which are available with the assessee on the date of estimate. As mentioned earlier, in the instant case the assessee failed to explain any basis for filing its estimate at Nil in spite of repeated opportunities given by the Assessing Officer and even subsequently no material has been brought on record to establish that the difference in the assessed income as compared to the estimate was on account of some unexpected or unforeseen reason. 10. The third case cited by the learned counsel is that of Southern Publications (P.) Ltd. v. CIT [1982] 137 ITR 822 (Mad.). This case deals with a situation where there was delay in filing of estimate of advance tax and it was held that mere rejection of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case no explanation, whatsoever, much less any evidence was filed by the assessee to justify its filing of estimate at Nil in spite of repeated opportunities having been given by the Assessing Officer. The learned counsel for the assessee had also vehemently argued that there was no mala fide or mens rea on the part of the assessee in filing its estimate at Nil. In this regard we may mention that the Hon'ble Supreme Court in the case of Gujarat Travancore Agency v. CIT [1989] 177 ITR 455 had referred to Corpus Juris Secundum to the effect that a penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws. On this basis the Hon'ble Supreme Court laid down that unless there is something in the language of the statute indicating the need to establish the element of mens rea, it is generally sufficient to prove that a default in complying with the statute has occurred. We think that there is nothing in the language of section 273(2)(a) which requires that mens rea must be proved before penalty can be levied un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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