TaxTMI 
TaxTMI 
1976 (3) TMI 76
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....termined at Rs. 2,57,290. This income was reduced in first appeal to Rs. 1,91,507. At this stage the Income Tax Officer worked out the tax payable at Rs. 1,06,262. He had issued a notice to the assessee under s.274 to show cause why penalty will not be levied for filing an estimate of total income which the as knew or had reason to believe to be untrue. The assessee explained vide his letter dated1st June, 1971that the estimate was filed on the basis of information available at the time of the estimate. The income of the assessee in the immediately preceding assessment year was only Rs. 15,215 and at the time of close of the accounts for the year the manager was not aware that the income would go beyond 1,00,000. The assessee had not filed the estimate which he knew or had reason to believe to be untrue. As such no penalty was leviable. The Income Tax Officer however, pointed out that the assessee had himself filed return for the assessment year for which the penalty has been levied declaring total income at Rs. 1,68,481. This itself was an indication of the fact that the assessee was well aware of the new total income at the time of filing the revised estimate on11th March, 1966. ....
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....said to have been out of the mind of the assessee. He also pointed out that the income was showing tendency to rise. The assessee, therefore, could not stick to the ratio of income and expenditure as in the earlier year. 6. The Appellate Asstt. Commissioner, however, noted that the Income Tax Officer had not taken into consideration the reduction in income granted by the Tribunal and the tax already paid by the assessee at Rs. 18,000. He considered the contention of the assessee regarding the adjustment of the refund of Rs. 21,534 but rejected it on the ground of it being irrelevant because the issue of refund was absolutely a separate and distinct matter which could not be linked with the payment which was due to be made by the assessee on the estimate of total income filed by him. 7. However, the Appellate Assistant Commissioner thought that on the basis of the submissions made by the assessee before him there was some justification for the reduction in the quantum of penalty. Accordingly considering all the circumstances and detailed explanation given before the Income Tax Officer the penalty was reduced from 30% to 10%. In doing so the learned Appellate Asstt. Commissione....
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....imposed on the facts of the case because neither the subsequent events nor subsequent conduct will relate back to the truth or falsity of an earlier estimate made by the assessee as held by the Rajasthan High Court in the case of Jaipur Metal and Elictricals Ltd(2). He, therefore, concluded his arguments by saying that the authorities below were unjustified both on facts and in law to impose the impugned penalty upon the assessee. 10. The learned Departmental Representative Shri Harjit Singh made a specious argument that the assessee at the time of filing the revised estimate knew or had reason to believe that the estimate is false because the amount of Rs. 1,00,000 declared as estimated total income was shown only against business income. There were various heads of income under which the income to be estimated had to be shown. The assessee, therefore, deliberately omitted to return the income under the heads salary, house property and other sources. Income under the head other sources was more than Rs. 9.000 and income from salaries was at Rs. 24,000. This clearly proved that the contentions raised before the Appellate Assistant Commissioner and repeated before the Tribunal we....
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....he first time by M/S. Radio and Electricals Ltd. vide their certificate dated 18th October,1956 (a copy wheron is enclosed herewith for your ready reference) intimating that an amount of Rs. 24,000 was payable by that company to Shri Narain Agarwal being the Managing Director's remuneration for the period from 1st April 1965 to 31st March 1966" it was, therefore, submitted before the Appellate Assitt. Commissioner that nothing towards remuneration was paid even till October 1966. These explanations were considered by the Appellate Asstt. Commissioner and rejected. The submissions made before the Appellate Assistant Commissioner by the learned counsel of the assessee have been repeated before us. We have considered these submissions as reproduced supra and find them reasonable and acceptable. 13. As provided u/s. 273(a) of the Act, penalty could be levied for false estimate of advance-tax if the income tax officer in the course of any proceedings in connection with the regular assessment was satisfied that the assessee had furnished an estimate of the advance-tax payable by him which he knew or had reason to believe to be untrue. The requirement of law is that true estimate shoul....