9911796707
TMI Blog1973 (10) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... in the sum of Rs. 50,000 till that date. On September 13 or 14, 1956, the assessee voluntarily revised its estimates showing an estimated income in the sum of Rs. 50,000. The department issued another notice to the assessee on December 1, 1956, making a revised demand upon the assessee to pay an advance tax in the sum of Rs. 1,03,458.75 on an estimated income of Rs. 3,03,565 based on the total income assessed for the accounting period relevant to the assessment year 1956-57. The assessee repeated its estimated income by its revised statement dated December 14, 1956, to be at Rs. 50,000. This estimate was filed by the assessee, it is claimed, on the basis of the books of account and material then available to the assessee. The assessee revised certain bills already submitted by it to the Government departments which resulted in increasing its profits by Rs. 27,755. These bills were revised some time after December 25, 1956. Not only that the assessee received a sum of Rs. 12,463 on December 20, 1956, from M/s. Rathi Steel Re-rolling Mills, Delhi, being some pool money on transfer of the steel quota. This brought in an unexpected profit in the sum of Rs. 40,000 and odd. The assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax . His further submission was that falsity of the explanation of the assessee was not enough to reach a conclusion of mens rea and he placed reliance on Commissioner of Income-tax v. Anwar Ali. This, he urged, was a relevant consideration because the provisions of section 28 are of a penal nature. Mr. S. K. Mal Lodha, learned counsel for the revenue, urged that the estimate is for the year and not for any quarter, and if a person failed to file a revised estimate under section 18A(2) then he was guilty of furnishing particulars which were untrue to his knowledge or at least which he had reason to believe to be untrue as proved in the circumstances of the case. He further urged that the assessee was in duty bound to file a revised estimate on the 15th March, 1957, in view of the provisions of section 18A(2) and the proviso thereto. He placed reliance on Commissioner of Income-tax v. S. Teja Singh , North Deccan Transport Ltd. v. Commissioner of Income-tax , N. V. N. Nagappa Chettiar v. Income-tax Officer, Pudukottai , and Appavoo Pillai v. Commissioner of Income-tax . His next submission was that if the assessee had made no grievance with regard to certain grounds at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay by way of tax the sum of Rs. 1,03,458.75. The appellant filed a revised estimate on September 13, 1956, showing an income of Rs. 50,000 and paid tax in the sum of Rs. 23,000. The estimate of the income was repeated on December 14, 1956. Thereafter no revised estimate was submitted by the assessee. The assessment was completed on August 31, 1960, and the total income was determined at Rs. 2,09,968 as against the income of Rs. 84,220 shown by the assessee. The explanation offered by the assessee was that certain bills were revised in the month of December, 1956, and as a result of this he had received a profit of Rs. 40,218 and, therefore, it had not made an incorrect estimate on September 13, 1956. The Tribunal observed that " it may be correct up to some extent but the appellant knew the correct position on 31st December, 1956, and so he could revise his estimate with some extent of accuracy on 15th March, 1957, which he had not cared to do. This clearly shows that the appellant never intended to pay tax on correct basis ". The question is whether in these circumstances the provisions of section 18A(9) read with section 28(1)(c) of the Act were attracted. Their Lordships of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Act, is satisfied that any person .- ...... (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, he or it may direct that such person shall pay by way of penalty, in the case referred to in clause (a), in addition to the amount of the income-tax and super-tax, if any, payable by him, a sum not exceeding one and a half times that amount, and in the cases referred to in clauses (b) and (c), in addition to any tax payable by him, a sum not exceeding one and a half times the amount of the income-tax and super-tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income ........" While examining the provisions of section 28(1)(c) of the Act the hon'ble judges of the Supreme Court in Anwar Ali's case have made the following observations: " But one of the principal objects in enacting section 28 is to provide a deterrent against recurrence of default on the part of the assessee. The section is penal in the sense that its consequences are intended to be an effective deterrent which will put a stop to practices which the legislature considers to be against the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court referred in the judgment quoted above is the consciousness on the part of the assessee at the time of the furnishing of the estimate which is material for attracting the penal provisions. Consciousness is a state of mind which must be correlated to the state of affairs at a given point of time, viz., when the estimate of income is submitted. In our opinion the legislature did not intend to levy penalty on those who lacked the capacity of correct anticipation. The truth or otherwise of an estimate at a given point of time is the gravamen of the charge in a proceeding under section 28(1)(c). And, therefore, in our view the learned Members of the Tribunal were in error when they observed that the estimate given on the 13th September, 1956, and repeated on the 14th December, 1956, " ceased to be an honest " estimate by subsequent events and, therefore, the provisions of section 28(1)(c) were attracted. It would be punishing an assessee for its incapacity to predict. The learned Members have themselves accepted that the unexpected income, which made a substantial addition of Rs. 40,218, came in the latter part of December, 1956. The assessee had estimated his income a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
