Timely returns with corrected disclosures and pre-assessment tax payment do not justify penalty for incorrect particulars.

Timely filed returns containing only incorrect or incomplete particulars did not attract penalty on these facts. The defect was not failure to file within the prescribed period, so the provision dealing with delayed filing was inapplicable. Penalty, if any, could arise only under the provision governing incorrect or incomplete returns; however, revised returns were filed and the differential tax was paid before completion of assessment. In those circumstances, penal action was not warranted, and the cancellation of penalty was upheld.

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Issues: Whether penalty was leviable for filing returns in time but with incorrect or incomplete particulars, and whether the penalty could be sustained under section 12(5)(ii) or section 12(5)(iii) when revised returns were filed and the tax difference was paid before assessment.

Analysis: The returns were filed within time, so the case did not involve failure to file returns within the prescribed period. On the facts found, the defect lay only in the incompleteness or incorrectness of the particulars shown in the returns. For such a case, penalty, if at all attracted, would fall only under the provision dealing with incorrect or incomplete returns and not under the provision relating to delayed filing. The record further showed that revised returns were filed and the tax due on the corrected turnover was paid before completion of the assessment. In those circumstances, even the provision concerning incorrect or incomplete returns was not attracted for penal action.

Conclusion: Penalty was not leviable. The cancellation of the penalty was upheld and the revision failed.

Final Conclusion: The judgment affirms that timely filed returns with corrected disclosures and pre-assessment payment of tax do not justify penalty on these facts.

Ratio Decidendi: Where returns are filed within time but contain only correctable defects, and revised returns with payment of the differential tax are filed before assessment is completed, penalty for delayed filing is inapplicable and penal action for incorrect or incomplete returns is also not warranted.

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