1981 (3) TMI 22

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....be stated briefly for a just disposal of the case are as follows: The petitioner is a firm carrying on business in hundi banking. It has its business in Trichy, Bombay and Bangalore. Separate books of account are kept in respect of the three centres and the return was filed for the assessment year 1964-65 on August 19, 1969, belatedly. The petitioner was assessed, on the return filed, to a taxable income of Rs. 1,30,100. The total tax payable by the firm was Rs. 10,934. Before the assessment was concluded on June 28, 1967, as is evidenced by the order of assessment, nearly the whole of the tax due had been paid leaving a balance of a few hundred rupees. However, proceedings under s. 271 (1)(a) of the Act were initiated against the petitione....

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....y extracting that portion of the order which deals with that question. " I, however, find that this is not the case. Subsequent to the completion of the original assessment for the assessment year 1964-65, the Income-tax Officer had to reopen the assessment under sec. 147 of the Act, as a result of information which came to his possession that part of the premises said to have been used for the assessee's business was occupied by the partners for their personal use. This fact had not been disclosed by the assessee when the original return was filed. It is, therefore, clear that the disclosure of the income made by the assessee was not a full disclosure. Further this was a firm formed consequent to the dissolution of another firm, which f....

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.... of the firm was not fully disclosed. All that the ITO on receiving the additional information subsequent to the original assessment order was to add back an allowance and bring that allowance to tax. The total income as disclosed in the original assessment was a full disclosure. Therefore, even here the Commissioner is not correct in coming to the conclusion that no case was made out under sub-s. (4A) of s. 271 of the Act for the late filing. As held by a Division Bench of the Punjab and Haryana High Court in the case of CIT v. Dev Raj [1975] 98 ITR 76, an inadvertent mistake was not equivalent to gross negligence or wilful neglect. The facts of that case were that the assessee was proceeded against under s. 271(1)(c) of the Act for con....