TMI Blog1959 (1) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... nch were justified? 2. Whether on the facts and in the circumstances of the case, the penalty of ₹ 25,000 sustained by the Appellate Tribunal under section 28(1)(c) of the Act was justified in law? The assessee is a dealer in rice, pulses, chillies etc. Visakhapatnam and had a branch during the relevant period in Madhya Pradesh. The year of assessment in question was 1943-44 for which the income of the previous year ending 31st March, 1943, was taken into consideration. The assessee first submitted a return on July 15,1943, declaring a net income of ₹ 30,285 and when the Income-tax Officer called for the books of account and during the course of the examination of accounts found several discrepancies, alterations and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding, it was of the view that the penalty of ₹ 50,000 was too high and that a sum of ₹ 25,000 would meet the ends of justice. Learned advocate for the assessee contends that when the results derivable from the books of account were discarded and an estimate of the income was made, under section 23(3) of the Act it was incumbent upon the income-tax authorities not only to state the basis upon which that estimate was made, but they must also given an opportunity to the assessee to rebut that basis. In the circumstances he sub- mits that there being no basis and the assessee not being given an opportunity to rebut that basis, the assessment was not proper and valid and must be set aside. With respect to the penalty proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material furnished to it by him and lastly it declined to take all the material that the assessee wanted to produce in support of its case and consequently the assessee had not a fair hearing. It is no doubt true that the Income-tax Officer and the Appellate Tribunal while making an estimate of the income did not say on what basis they came to that conclusion, but the Appellate Tribunal unmistakably referred to the omission in the following words: The departmental representative was unable to furnish any comparable cases. The Income-tax Officer also has not given any basis for the estimate, except saying that the income was fixed after local enquiries. It may be that the local enquiries are necessary, but it is prudent and safer to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur branch at ₹ 70,000, if so the Tribunal was perfectly justified in having recourse to the statements of the assessee himself in computing the income from the Visakhapatnam branch. From the Income-tax Officer's order it is clear that the assessee's clerk had at the time of explaining the accounts to the Income-tax Officer certain papers which the Officer took from him. These papers disclosed that a profit and loss account was prepared for the Rajpur branch showing a net profit of ₹ 63,768. It is thus clear that there was certainly material on record on which the Tribunal could base its computation at ₹ 70,000 and we have no doubt whatever that the assessee has clearly manipulated his accounts and attempted to conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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