TMI Blog1983 (9) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... r books and from that he inferred that the claims for expenses were inflated to the extent of Rs. 32,275. The ITO also noticed that in the regular accounts, there was a deficit of Rs. 15,868 when compared with note book No. 5. However, the ITO added both the differences and treated an amount of Rs. 50,000 as omission in the income shown. He also took note of various credits amounting to Rs. 1,53,159 and added the same to the total income. Thus, the ITO finally computed the total income at Rs. 2,00,000. The assessee appealed to the AAC, who had deleted the addition of Rs. 1,53,159 in respect of various credits. He, however, sustained the addition of Rs. 50,000. Thereafter, the matter was taken to the Income-tax Appellate Tribunal and the Tribunal taking note of the various other circumstances held that the addition should be restricted to Rs. 25,000 as against Rs. 50,000 sustained by the AAC. Subsequently, the IAC initiated penalty proceedings under s. 271(1)(c) of the I.T. Act, 1961, hereinafter referred to as " the 1961 Act ". In those proceedings, the IAC found that the expenses debited in the regular book of account in respect of several items were higher than the expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: " 271 (1). If the Income-tax Officer or the Appellate Assistant Commissioner or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person . ...... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty ............. (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income Provided that, if in a case falling under clause (c), the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished exceeds a sum of twenty-five thousand rupees, the Income-tax Officer shall not issue any direction for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner." Having regard to the above provision, the question for our considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount book, and not on the basis of an estimate. It is only when the matter came before the Tribunal, the Tribunal, based on its estimate, reduced the addition to Rs. 25,000. Merely because the addition sustained was on the basis of an estimate, it cannot be said that s. 271(1)(c) of the 1961 Act will not be attracted. If the anamath account book formed the basis of an addition to the income returned, whether addition is by way of an estimate or actuals, the assessee should be taken to have furnished inaccurate particulars of his income, for, he had submitted a return disclosing only an income of Rs. 13,522. It is not, therefore, possible for us to hold that the assessee has not furnished inaccurate particulars of his income. As a matter of fact, the view taken by the Tribunal that if the addition to the income returned is based on an estimate, the penalty provision will not stand attracted appears to be not only inconsistent with the statutory provision in s. 271(1)(c) of the 1961 Act, but also with the decisions rendered in the following cases: Cement Distributors Private Ltd. v. CIT [1966] 60 ITR 586 (Mad) was a case more or less similar to the case before us. In that case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, therefore, the levy of penalty was not justified. When the matter came to this court, this court expressed the view that the assessment by the ITO for the assessment years 1963-64 to 1965-66 was not based on mere guess work, but was based on the statements of assets and liabilities filed by the assessee in wealth-tax proceedings showing an increase in his net wealth, and that, therefore, in respect of such an estimate of income, which was also accepted by the assessee, penalty could be levied. This court took note of the following facts while sustaining the penalty, (1) the Tribunal had not applied its mind properly to the facts of the cases relating to the said three assessment years; (2) the ITO had only made an estimate on the basis of statements of assets and liabilities filed by the assessee ; (3) the assessee did not produce any accounts for the relevant years, but had accepted the estimate made by the ITO ; and (4) there is clear scope for holding that the assessee had concealed his particulars of income or filed inaccurate particulars thereof in the three relevant years and the difference between the assessed income and the returned income would represent concealed inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee resisted the same and the Tribunal deleted the penalty. When the matter was taken to this court, this court found that with regard to the additions made by the ITO towards the income from the lorries, the assessee had not produced any evidence to show that the lorries had been sold as stated by him and held that the fact that the permits of the lorries continued to stand in the name of the assessee clearly indicated that the assessee put up false claims, that as such the assessee had deliberately concealed his income from the running of the lorries and that, therefore, the Tribunal was in error in deleting the penalty levied as regards the concealment of income from the lorries. Thus, the decision of the Tribunal in this case runs counter to the uniform view taken by this court in the above decisions wherein the penalty provision has been applied even in cases where assessment is made on the basis of an estimate or where an addition towards concealment has been made on the basis of an estimate. We cannot, therefore, sustain the view taken by the Tribunal in this case. The learned counsel for the assessee relies on a decision of the Supreme Court in CIT v. Ashoka ..... X X X X Extracts X X X X X X X X Extracts X X X X
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