TaxTMI 
TaxTMI 
2007 (5) TMI 181
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....sessment year 1987-88, the assessee has filed its return showing an income of Rs. 32,000. Along with the return of income the assessee has not attached any documents, except one challan of advance tax of Rs. 1,500. The assessment was completed under section 143(3) of the Act. The returns of the assessment years 1988-89 and 1989-90 had been filed on March 17, 1990, proceedings of which has been completed under section 143(1)(a) of the Act. These returns also did not accompany any document, i.e., trading account, profit and loss account and balance-sheet, etc. During the course of assessment proceedings, certain queries were raised from the Sales Tax Department and from the Escort Ltd. from where the assessee had made purchases of tractors and its spares. The sales of the assessee as per the Sales Tax Department for the assessment years 1987-88 to 1989-90 are as under Rs. Assessment year 1987-88 63,31,508 Assessment year 1988-89 1,13,01,855 Assessment year 1989-90 1,14,41,807 5. Since the turnover of the assessee exceeded rupees forty lakhs in each of the three assessment years, i.....
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....nder section 271A of the Act but that would not take out the jurisdiction of the assessing authority to impose the penalty under section 271B of the Act. The submission is wholly misconceived. Section 44AB of the Act read as follows "44AB. Every person,— (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year, or (b) carrying on profession shall, if his gross receipts in profession exceed ten lakh rupees in any previous year, get his accounts of such previous year audited by an accountant before the specified date and obtain before that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed." 9. The penalty provisions are contained in sections 271A and 271B of the Act which are reproduced below: "271A.—Without prejudice to the provisions of section 271, if any person fails to keep and maintain any such books of account and other documents as required by section 44AA or the rules made thereunder, in respect of any previous year or to retain such books of ac....
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....returns are not being filed, there is unanimous judicial view that no penalty can be imposed for concealment of income and that is why Parliament had to make suitable amendment in the penalty provision by inserting Explanation 3 to section 271 of the Act and Explanation 3 to section 18 of the Wealth-tax Act, 1957. 11. The question as to whether an assessee has concealed the particulars of his turnover where he has not filed the return came up for consideration before the apex court in the case of Narain Das Suraj Bhan v. Commissioner, Sales Tax [1968] 21 STC 104. The apex court, while considering the provisions regarding the imposition of penalty provided under clause (b) of section 15A(1) of the U. P. Sales Tax Act, has held as follows (page107) "In our opinion, clause (b) of section 15A(1) is attracted as soon as it is shown that the assessee has concealed the particulars of its turnover or deliberately furnished inaccurate particulars of such turnover in the return filed under section 7 of the Act. It is manifest that from the grammatical point of view the words 'inaccurate particulars of such turnover' in clause (b) of section 15A(1) refer back to clause (a) where the ret....
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....w that we are taking." 13. In the case of Thoppil Kutti Eroor v. CIT [1958] 34 ITR 850, the Kerala High Court, while considering the question of imposition of penalty under section 38(1) (c) of the Cochin Income-tax Act which provides imposition of penalty for concealment or for furnishing inaccurate particulars, has held as follows (page 856) "It is impossible to say that when a person has failed to furnish any return at all what he has done is to conceal the particulars of his income or to deliberately furnish inaccurate particulars of such income within the meaning of clause (c) of section 38(1) of the Act. We entertain no doubt that the offence in such a case should be considered as one coming under clause (a) and not under clause (c) of sub-section (1) of section 38." 14. In the case of S. Narayanappa and Brothers v. CIT [1961] 41 ITR 125, the Mysore High Court has held as follows (page 133): "What was urged before us was that in a case where an assessee has furnished no return at all before the Income-tax Officer, it should be presumed for the purposes of section 28(1)(b) that he has furnished a return of his income intimating the Income-tax Officer t....