Bona fide omission in return does not warrant suppression penalty when corrected before final assessment

A bona fide omission in a return, where the omitted turnover was already reflected in the accounts and was voluntarily brought to the assessing authority's notice before assessment was completed, does not justify penalty for suppression. The factual finding that the error was inadvertent rather than deliberate or wilful is decisive, and cooperation in finalising the assessment supports that conclusion. Even if mens rea is not generally required under the penalty provision, no suppression can be inferred on these facts where the mistake was corrected before final assessment. The Tribunal's cancellation of penalty was therefore upheld.

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Issues: Whether penalty was exigible for omission to disclose part of the turnover in the return when the omission was found to be due to a bona fide mistake and was brought to the notice of the assessing authority before completion of assessment.

Analysis: The return was found to be incomplete because a portion of the sales turnover was omitted, but the accounts maintained by the assessee reflected the sales and the mistake was voluntarily pointed out to the assessing authority before the assessment was completed. The Tribunal recorded a factual finding that the omission was not deliberate or wilful, but was due to a bona fide mistake, and that the assessee cooperated in finalising the assessment. In such circumstances, the omission could not be treated as suppression warranting penalty. The earlier authorities relied upon were applied to hold that where an assessee corrects an inadvertent mistake before final assessment, no suppression can be inferred, even though mens rea is not generally necessary for penalty under the relevant provision.

Conclusion: The penalty was not sustainable and the cancellation of penalty by the Tribunal was upheld in favour of the assessee.

Final Conclusion: The revision failed because the finding of bona fide omission displaced the basis for penalty under the sales tax provisions.

Ratio Decidendi: Where an omission in the return is found, on facts, to be a bona fide mistake and the assessee voluntarily corrects it before completion of assessment, penalty for suppression or incorrect return is not warranted.

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