TMI Blog1994 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of sub-section (2), " previous year ", in relation to the assessment year, commencing on the 1st day of April, 1989, means the period which begins with the date immediately following the last day of the previous year relevant to the assessment year commencing on the 1st day of April, 1988, and ends on the 31st day of March, 1989. It is also contended by the petitioner that the said circular was published in the journal Income Tax Reports. Accordingly, the petitioner-company filed its return of income for the assessment year 1988-89, comprising the period of 18 months from October 1, 1986, to March 31, 1988, on August 12, 1988. The said return was accompanied by an application dated August 9, 1988, under section 3(4) of the Income-tax Act, 1961, for permitting the petitioner to change the period of assessment on the basis of the circular issued by the Central Board of Direct Taxes. By the said application, the petitioner requested that the change in the period of the previous year from October 1, 1986, to March 31, 1988 (18 months), be approved by considering the circular issued by the Central Board of Direct Taxes, and the press note dated June 10, 1988. The petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated February 4, 1988, issued by the Central Board of Direct Taxes. As against this, Mr. Shelat, learned counsel appearing on behalf of the respondent, referred to the affidavit-in-reply, and pointed out that there would be loss of revenue, if the petitioner is permitted to change the previous year. For this purpose, he has relied upon the statement annexure "A" produced along with the affidavit-in-reply. In our view, considering the statement annexure-A to the affidavit-in-reply, it is apparent that the approach adopted by the respondent is totally unreasonable. From the said statement, it is clear that if the period is taken as ending on September 30, 1987, the total tax payable would be Rs. 92,58,318, and if it is taken as ending on March 31, 1988, the total tax payable would be Rs. 1,12,75,081. The respondent wants to add Rs. 89,25,000 to Rs. 92,58,318 by holding that the petitioner is liable to pay penalty under section 271(1)(c) of the Income-tax Act. For this purpose, it is necessary to refer to the said statement as a whole, which is as under : ------------------------------------------------------------------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 per cent. 64,77,058 91,49,139 Penalty under section 271(1)(c) : (1) Minimum penalty 100 per cent. of tax sought to be evaded 89,25,000 -- (2) Maximum penalty 200 per cent. 1,78,50,000 -- Total tax, interest and penalties in both the situations : Total tax 92,58,318 1,12,75,081 Interest under section 215/217 2,69,923 3,52,223 Interest under section 216 1,96,174 2,55,861 Penalty under section 273(1)(b) : Minimum 4,31,803 6,09,942 Penalty under section 271(1)(c) : Minimum 89,25,000 -- -------------------------------------- Total 1,90,81,218 1,24,93,107 -------------------------------------- In support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on March 31, 1988 (annexure "F"). The said statements are on the basis of the audited accounts of a public limited company. Nothing is stated in the affidavit-in-reply to point out that the said statements are, in any way, incorrect or that the petitioner has concealed any particulars. In any case, the question of concealment of particulars would arise only at the time of assessment, and not prior to that. Hence, if the penalty under section 271(1)(c) is not taken into consideration, in the statement annexure A produced with the affidavit-in-reply, there would not be any loss of revenue, because the assessed tax would be Rs. 92,58,318 if the period is taken up to September 30, 1987, and it would be Rs. 1,12,75,081, if the assessment period is taken up to March 31, 1988. It is also to be noted that the respondent has not taken into consideration the fact that the petitioner was required to change the assessment period prior (?) to the amendment in the Income-tax Act, viz., amendment to section 3 of the Act. Present section 3 was substituted with effect from April 1, 1989. Because of the said change in the section, the Central Board of Direct Taxes had issued a circular, dated 4t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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