TMI Blog1981 (3) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... on business in hundi banking. It has its business in Trichy, Bombay and Bangalore. Separate books of account are kept in respect of the three centres and the return was filed for the assessment year 1964-65 on August 19, 1969, belatedly. The petitioner was assessed, on the return filed, to a taxable income of Rs. 1,30,100. The total tax payable by the firm was Rs. 10,934. Before the assessment was concluded on June 28, 1967, as is evidenced by the order of assessment, nearly the whole of the tax due had been paid leaving a balance of a few hundred rupees. However, proceedings under s. 271 (1)(a) of the Act were initiated against the petitioner-assessee-firm for belated filing of the return for the relevant assessment year. While those proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is not the case. Subsequent to the completion of the original assessment for the assessment year 1964-65, the Income-tax Officer had to reopen the assessment under sec. 147 of the Act, as a result of information which came to his possession that part of the premises said to have been used for the assessee's business was occupied by the partners for their personal use. This fact had not been disclosed by the assessee when the original return was filed. It is, therefore, clear that the disclosure of the income made by the assessee was not a full disclosure. Further this was a firm formed consequent to the dissolution of another firm, which fact was already within the knowledge of the Income-tax Department and so, the filing of the return wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the original assessment order was to add back an allowance and bring that allowance to tax. The total income as disclosed in the original assessment was a full disclosure. Therefore, even here the Commissioner is not correct in coming to the conclusion that no case was made out under sub-s. (4A) of s. 271 of the Act for the late filing. As held by a Division Bench of the Punjab and Haryana High Court in the case of CIT v. Dev Raj [1975] 98 ITR 76, an inadvertent mistake was not equivalent to gross negligence or wilful neglect. The facts of that case were that the assessee was proceeded against under s. 271(1)(c) of the Act for concealment of income on the ground that certain items had not been returned in the income such as househol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that in filing a return the assessee may by inadvertent mistake or oversight have failed to add back certain income as, in the instant case, the portion of the rent assessable as personal to some of the partners of the assessee-firm. That in itself will not be either wilful negligence or concealment with knowledge. I have already held that this event is not relatable to the question of delay in filing the return. Therefore, there is clearly a misapplication of mind by the respondent-Commissioner in dealing with the revision application of the petitioner. Therefore, it is liable to be set aside and it is so set aside. The matter is remitted to the Commissioner to make a fresh order in accordance with law and in the light of the observ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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