1972 (10) TMI 114

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....icory, and for the assessment year 1963-64, he returned a taxable turnover of Rs. 1,20,674.06. At the stage of the assessment proceedings, the assessing authority called for the account books and found that the sales of chicory to the Coffee Board to the extent of Rs. 3,71,844.45 had been omitted to be included in the assessee's return. When this was pointed out to the assessee, the assessee expla....

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....lly settled in relation to the supplies made. But the appellate authority did not accept this contention and held that the turnover in question had been rightly brought to tax in the assessment year. The assessee also questioned the imposition of penalty before the appellate authority but without success. There was a further appeal to the Tribunal. But the appeal related only to the question of pe....

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....e mere submission of an incorrect return will not entail a penalty under section 12(3) and to sustain an order of penalty under section 12(3) there should have been a best judgment assessment by the assessing authority on rejection of the return and the account books submitted by the assessee. It is pointed out that in this case there was no suppression of the disputed turnover in the account book....

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....incorrect return, but the assessee's account books indicated the turnover in dispute and the assessing authority brought that turnover to tax along with the turnover returned. On those facts, the Supreme Court has held that whenever the assessment is made accepting the entries in the books of account of the assessee, section 12(3) cannot be invoked. The above decision straightaway applies to the f....