1977 (6) TMI 51

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... charges as per receipt No.73 dt. 7th Oct.,1971. When this was pointed out especially in the background that in the immediately preceding year the income was assessed at a higher figure than what was returned by the assessee, on behalf of the assessee a sum of Rs.10,000 was offered as an additional income. Accordingly the assessment was completed on total income of Rs. 28,000 as against Rs. 19,514 offered(Originally returned Rs. 9,514+10,000 offered subsequently) 3. For the asst. yr. 1973-74 also the ITO noticed omission of 7 items though there were receipts issued by the assessee for the same. The assessee similarly offered Rs. 10,000 for that year also besides the original income returned at Rs. 10,272. The ITO adopted the same figure ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... and it may be that the mistake has crept in on account of overlooking a particular receipt. It is true that the assessee offered Rs. 10,000. That was done only to have the assessment finalised specially because in the past the assessments were made at higher figures. When in the immediately two preceding years the assessments were made on enhanced figures the ITO levied penalties by applying Expln. to s. 271(1)(c).But the AAC chose to cancel the penalties and the orders have become final Merely because the assessee himself offered Rs. 10,000 in order to bring his income in conformity with the past assessments and in order to purchase peace and make the assessments final it cannot be said that the sum of Rs. 10,000 offered by the assessee c....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he assessee has been grossly negligent in not returning the correct income. The omission is in respect of seven items and they cannot be ignored or explained away as being inadvertent mistakes. The case clearly comes within the mischief of the explanation to s. 271(1)(c). The question however is whether the penalty should be confined to the income that is assessed by virtue of the addition ultimately made or it will be with reference to the actual amount found. In our opinion even applying the explanation to s. 271(1)(c) all that can be said is that there has been gross or wilful negligence on the part of the assessee in omitting seven items of receipts. The question of treating any other amount which has been added by the ITO by estimate f....