TMI Blog1987 (11) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... union of the Bank workers, the actual bonus, which had to be paid for this year in the calendar year 1972, happened to exceed the provision by Rs. 3,45,505. This excess was debited in the account books of the calendar year 1972 relevant to the assessment year 1973-74. In the return that was filed for the assessment year 1972-73 the assessee-bank in the course of the assessment proceedings claimed not only the provision for bonus amounting to Rs. 30 lakhs but also the excess of Rs. 3,45,505, which was the liability relating to that year but actually paid in the subsequent year. Here it will be necessary to point out that the claim of deduction of Rs. 3,45,505 was also made for the assessment year 1973-74 based on this amount being debited in the account books for the calendar year 1972 relevant to the assessment year 1973-74. The Inspecting Assistant Commissioner (Assessment) allowed the entire claim of bonus amounting to Rs. 33,34,505 (comprised of Rs. 30 lakhs provision and additional Rs. 3,34,505 actual payment relating to that year made in the subsequent year) while making the assessment for the assessment year 1972-73 on 27-2-1975. However, the claim of the additional amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us. 3. The learned counsel for the assessee-bank, Shri Palkhivala, submitted to us that the method of accounting adopted by the assessee-bank was mercantile and, therefore, one view was that the bonus in excess of the provision relating to a particular year was an admissible deduction in working out the business income for that year, and not for any other year. On the other hand, there was another view that since the actual liability for bonus was determined only as result of settlement with the union of the bank workers in the subsequent year, the excess over the provision can only be allowed in the year in which the actual liability was ascertained. It was in these circumstances, according to Shri Palkhivala, that the assessee-bank had to make a claim of actual liability for bonus in excess of the provision made in the account books both in the year to which it related and in the subsequent year in which the actual liability was ascertained. A chart was filed before us to show that on the dates on which the returns or the revised returns were returns were filed for the assessment years 1973-74, 1974-75, 1975-76 and 1978-79, the assessments for the immediately preceding assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 1978-79, was still to be completed and, therefore, brought it to the notice of the income-tax authorities who made enquiries not only for that assessment year but also for the earlier assessment years 1973-74, 1974-75 and 1975-76. Shri Palkhivala brought to our notice that the assessee-bank was very forthright in admitting that there had been a double deduction for these assessment years and agreed to be assessed on the amount for which the deduction was doubly allowed. 4. Shri Palkhivala referred to the order of the Income-tax Appellate Tribunal in the case of ITO v. Hindustan Petroleum Corpn. Ltd. [1986] 16 ITD 574 (Bom.), at page 593 where the Appellate Tribunal held that there could be no deliberate intention on the part of a wholly-owned Government company to underestimate its income and advance tax payable based thereon in the first two installments with any motive whatsoever. Proceeding further, Shri Palkhivala submitted that the assessee under consideration here was a nationalised bank wholly-owned by the Government and, therefor, there could be no intention on the part of the assessee-bank to conceal its income or furnish inaccurate particulars thereof with a view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect from 1-4-1964, section 271(1)(c) was amended with effect from 1-4-1964 and the word 'deliberately' was omitted and, therefore, the arguments of Shri Palkhivala will not be applicable to the assessment years 1973-74, 1974-75, 1975-76 and 1978-79 under appeal before us. The authority of the Hon'ble High Court of Punjab and Haryana in the case of CIT v. Ravail Singh Co. [1986] 157 ITR 747 was cited before us in support of the contention that the ruling of the Hon'ble Supreme Court in the case of Anwar Ali does not apply and the element of means are is not important after the amendment of section 271(1)(c) in 1964. Reference was also made by him to the ruling of the Hon'ble High Court of Kerala in cases of CIT v. India Sea Foods [1976] 105 ITR 708 and CIT v. Gujarat Travancore Agency [1976] 103 ITR 149 (FB) and the Hon'ble High Court of Orissa in the case of CIT v. Puranmal Prabhudayal [1977] 106 ITR 675 in support of the contention that a fraudulent claim of deduction also amounts to concealment of income or furnishing inaccurate particulars thereof, where there are two defaults, one of which was punishable by imposition of penalty and another, which punishable with imprisonme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f with a view to evade payment of proper taxes due to the Government of India. We have the authority of the Hon'ble Supreme Court in the case of Brij Mohan v. CIT [1979] 120 ITR 1 that the concealment of income or furnishing of inaccurate particulars thereof takes place when the return of income is filed. We have, therefore, to consider the facts and circumstances at the time the return of income was filed for deciding whether the assessee-bank can be charged with the default of concealment of income or furnishing of inaccurate particulars thereof. Viewed in this context, it is found in the present case that the assessee-bank was fallowing the mercantile system of accounting and the liability for bonus relating to a particular year for which a provision was made in the account books of that year crystallized in the next year when a result of negotiations with the union of bank workers the exact amount to be paid as bonus was settled. In these circumstances, if the assessee-bank was in doubt whether the excess amount, i.e., over and above the provision for bonus, which the bank had to pay in the year in which the actual amount was settled after negotiations with the union of the ban ..... X X X X Extracts X X X X X X X X Extracts X X X X
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