TMI Blog1985 (8) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... en the assessment had taken place on the basis of the revised trading account and the return filed by the petitioner? 2.. Whether, in the facts and circumstances of the case, the learned Members of the Board committed an apparent error in maintaining the quantum of penalty without applying their judicial mind as to what penalty would meet the ends of justice looking to the background of the petitioner and further the fact that he had filed the revised trading account and the return before the assessment and the assessment had taken place on the basis of the revised return filed by the petitioner? 3.. Whether, in the facts and circumstances of the case, when the learned Members of the Revenue Board held that the penalty imposed by the Commercial Taxes Officer was illegal being more than the twice leviable under section 16(1)(e) of the Act, it was not open to non-petitioners Nos. 1 and 2 to modify that penalty so as to reduce it to the maximum leviable under section 16(1)(e) of the Act and thus committed an error because non-petitioners Nos. 1 and 2 ought to have sent back the case to the Commercial Taxes Officer to levy proper penalty. In any case they ought to have applied th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Commercial Taxes, Bikaner, who upheld the levy of tax on concealed turnover of Rs. 9,64,100.91. However, the quantum of penalty was reduced nominally to Rs. 57,846 as according to him there was an error in computation of the amount. The dealer-assessee filed revision before the Board. While dealing with the contention raised on behalf of the dealerassessee that penalty was not justified in the present case, the Board took into consideration the circumstances to which its attention was drawn and thereafter agreed with the view taken by the assessing authority as well as the Deputy Commissioner (Appeals) that a case for levy of penalty was made out. The revision was rejected. It is necessary to extract the following from the judgment dated 27th August, 1980, passed by the Division Bench of the Board: ".....In respect of the transactions in the name of Messrs. Gill and Company it has been conceded by the learned authorised representative of the assessee before the learned Deputy Commissioner (Appeals), Commercial Taxes, Bikaner, that the said sales were taxable under the Rajasthan Sales Tax Act. The tax imposed on the disputed turnover of Rs. 9,64,100.91 was maintained by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s real intent to conceal the sales." It appears that the Board was considerably influenced by the fact that nondisclosure of the transactions regarding which the concealment has been alleged is of great magnitude and this shows that the dealer-assessee intended to conceal the sales. In other words, the Board has given emphasis to the amount involved in the transactions which have been concealed for maintaining the penalty. We have duly considered the reasons given in para 6 of the judgment of the Board which is the only relevant para for the present purpose. It is not in dispute that prior to the completion of the assessment the dealer-assessee had furnished voluntarily revised trading account and return showing the concealed transactions in the turnover. The disputed turnover of Rs. 9,64,100.91 was shown in the revised return. A great emphasis was given by the learned counsel for the assessee-dealer that the voluntary disclosure prior to the completion of the assessment by the assessing authority negatives the fact that there was either conscious concealment of the particulars from the returns furnished by the assessee-dealer or that the dealer-assessee had deliberately furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22, which dealt with imposition of penalty, their Lordships of the Supreme Court held that before penalty can be imposed the entirely of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. It may be stated here that formerly in the provisions relating to imposition of penalty in the Act of 1961 in the second part of section 271(1)(c) the word "deliberately" was there. The expression used was "deliberately furnished inaccurate particulars of such income". The word "deliberately" was omitted by the Finance Act, 1964, w.e.f. 1st April, 1964. Anwar Ali's case [1970] 76 ITR 696 (SC) was followed in Anantharam Veerasinghaiah Co. v. Commissioner of Income-tax, A.P. [1980] 123 ITR 457 (SC). While considering the question of imposition of penalty, it was observed as under: "This is the provision as it stood at the relevant time. It is now settled law that an order imposing a penalty is the result of quasi-criminal proceedings and that the burden lies on the revenue to establish that the disputed amount represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of inaccurate particulars is not sufficient to attract the penalty provisions contained in section 271(1)(c) of the Act of 1961. But in order that penalty may be imposed, there should be conscious concealment of particulars or inaccurate particulars must have been furnished deliberately by the assessee. The learned judges, while agreeing with the observations made in Commissioner of Income-tax v. Ramdas Pharmacy [1970] 77 ITR 276 held that the entirety of circumstances must be taken into consideration and the conduct of the assessee from the inception to the conclusion of the assessment proceedings must be viewed in order to find out whether a criminal intention of conscious concealment of true particulars of income or deliberate furnishing of inaccurate particulars by the assessee has been established. So having regard to the language used in section 271(1)(c) which is more or less the same as used in section 16(1)(e) of the Act, it is abundantly clear that before levying penalty under section 16(1)(e) of the Act all the circumstances of the case have to be *Here italicised. taken into consideration in the penalty proceedings and if from those circumstances conscious conceal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1985] 151 ITR 333, it has been stated that if the assessee himself voluntarily files a revised return before the order of assessment is made, after he has himself discovered an omission or wrong statement in the original return, then in such a case, penalty for concealment of particulars of income or for furnishing inaccurate particulars of such income, as contemplated under section 271(1)(c) cannot be imposed. Had this been given a proper consideration, one does not know to what conclusion the Board might have reached in connection with the imposition of penalty on the dealer-assessee. We have stated all this to show that the Board, while maintaining the imposition of penalty on the dealer-assessee, has not considered the circumstances in their entirety in the penalty proceeding in the right perspective and seems to have been influenced by considerations which have been given under weightage than which in fact should have been given. In view of the course that we have decided to adopt in this case, we do not consider it proper to give various reasons for or against the imposition of penalty on the dealer-assessee. The judgment maintaining imposition of the penalty by the Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount not exceeding two thousand rupees.................and in addition.................any sum collected by the person by way of tax in contravention of section 46 shall be forfeited to the State Government. Their Lordships of the Supreme Court held that the notion that a penalty or a punishment cannot be cast in the form of an absolute or no-fault liability but must be preceded by mens rea is not correct. Therefore, the contention that section 37(1) fastens a heavy liability regardless of fault has no force in depriving the forfeiture of the character of penalty and the fact that in section 37(1) mens rea is excluded and the penal forfeiture can be enormous are germane to legislative policy, not for judicial compassion. This decision has little bearing on this case in view of the provisions of section 16(1)(e) of the Act which are under consideration. The two decisions relied on by Mr. K.C. Bhandari are not of any assistance. The upshot of the above discussion is that the finding of the Board sustaining the penalty stands vitiated for non-consideration of the important and material circumstances and also for the reasons which we have already adverted hereinabove. The next ..... X X X X Extracts X X X X X X X X Extracts X X X X
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