1983 (2) TMI 266

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....ecessary ingredient for the application of sub-sections (4) and (5) of section 12. What happened in this case was this. The assessee submitted a return showing a taxable turnover of Rs. 95,741.50. The assessing authority, however, after a check of his accounts, determined the taxable turnover at Rs. 7,83,250. The assessing authority, after a check of the books of account of the assessee, found that the assessee had failed to disclose a huge turnover in the A-2 returns, though it found its place in the accounts, with a view to postpone payment of tax legitimately due to the Government. The assessing authority therefore levied a penalty of Rs. 21,242 under section 12(5) of the Act for the non-disclosure of certain turnover in the A-2 retur....

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....ent was completed on the basis of the turnover figures found in the accounts after rejecting the returns. The assessing authority found that there was discrepancy in the turnover between the book figures and the figures as returned by the assessee. Thus the assessing authority found the return filed by the assessee to be incorrect and accepted the accounts to be correct and proceeded to make a best judgment assessment on the basis of the turnover figures found in the accounts. In view of the circumstances that the assessment was based on the turnover figures found in the accounts, sub-section (4) of section 12 comes into operation. Sub-section (4) of section 12 reads as follows: "(4) Notwithstanding anything contained in sub-sections (1)....

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....guage of sub-section (4) of section 12, the contention put forward on behalf of the assessee, that once the turnover returned is found to be incorrect even though the accounts were found to be correct, the said provision will not stand attracted, cannot be accepted. A conjoint reading of sub-section (2), (3) and (4) of section 12 would indicate that section 12(3) will come into operation when no return is filed within the prescribed period, or when the return filed is found to be incorrect or incomplete. But sub-section (4) of section 12 will come into play only when the return filed by the assessee, which is found to be incorrect or incomplete, is inconsistent with the entries found in the accounts which are accepted as correct. Thus sub-s....