TaxTMI 
TaxTMI 
2023 (9) TMI 1732
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....ved to the petitioner on 31.10.2019. The second respondent on 14.09.2020 has passed the order by revising the assessment for the reason that the petitioner's accounts were selected for Desk Audit. 3. The contention of the petitioner is that such an audit is unknown to the provisions of the TNVAT Act, 2006. Hence, the petitioner filed a W.P. (MD)No.15657 of 2020, challenging the order dated 14.09.2020 as barred by limitation and also on the ground of violation of principles of natural justice. The said Writ Petition is disposed on 21.04.2021 directing the second respondent to pass fresh order, after giving opportunity to the petitioner. Pursuant to the order of this Court, the second respondent issued notices dated 27.07.2021, 27.08.2021 and 11.11.2021 and the petitioner has replied on various letters dated 12.08.2021, 13.09.2021 and 26.11.2021 respectively. In one of the above letters, the petitioner has requested to furnish the order passed by the Commissioner shown in the reference, in which the petitioner's accounts has been selected for scrutiny. In the said communication, it is stated that the account of the petitioner has been selected by the Commissioner of Commer....
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....and, prepared for the purposes of this Act shall be treated as confidential and shall not be disclosed. Since the said report is covered under section 85, the second respondent is not bound to grant the same. By taking the order and the evidence stated thereunder, the present impugned order is passed which is acceptable and the same is sustained as per law. Hence, the respondent prayed to dismiss this Writ Petition. 6. Heard Mr.K.Srinivasan, learned counsel appearing for the petitioner, Mr.R.Suresh Kumar, learned Additional Government Pleader appearing for the respondent and perused the materials available on record. 7. It is seen from the original assessment order, the respondents have taken the sale value of used car at Rs.6,10,011/- (Rupees six lakh ten thousand eleven) and proposes to assess tax at 5% i.e. Rs.30,500/- (Rupees thirty thousand five hundred). The petitioner objected to such addition, since the assessment is only for the Vignesh Constructions which is the registered company. But the said car used for the individual purposes and the RC book is in the name of P. Velusamy, not in the name of Vignesh Constructions. The respondent is not accepting the petiti....
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....the final statement of profit and loss given by the assessee he must either hold that there is no method of accounting or that the method employed is such that it does not disclose the true profits and losses of the firm ....... in this case there is no definite finding by the Income-tax Officer that the case falls within the proviso to section 13, for he does not say that the method of accounting employed by the assessee was such that in his opinion "the income, profits and gains could not properly be deduced therefrom". In the second place, even if such a finding were to be implied from his order it cannot be said that there was material before him which would enable him to come to this finding. The fact that the profits appeared to him to be insufficient and the fact that there was no stock register maintained by the assessee are not in my view materials upon which such a finding can be given, but these are circumstances which may provoke an enquiry. The Income-tax Officer must discover evidence or material aliunde before he can give such a finding.' If the assessee has regularly employed a method of accounting even if the profit as entered in his accounts is not the t....
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....that the purchases in the transactions were inflated or the sales were suppressed. 15. In Commissioner of Sales Tax Vs. H.M. Esufali H.M. Abdulali, it was held that in estimating any escaped turnover, it is inevitable that there is some guess-work. The assessing authority while making the best judgment assessment, no doubt, should arrive at his conclusion without any bias and on a rational basis. That authority should not be vindictive or capricious. If the estimate made by the assessing authority is a bona fide estimate and is based on a rational basis, the fact that there is no good proof in support of that estimate is immaterial. Prima, facie, the assessing authority is the best judge of the situation. It is his best judgment and not anyone else's. The High Court cannot substitute its best judgment for that of the assessing authority. The Supreme Court also held that penalty of Rs. 2,000 imposed on the footing of the revision of the amount of turnover for the whole year was justified. 16..... 17. In the instant case before us, it is relevant to note that there had been no adequate ground for rejecting the accounts and as such there is no just....
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....Therefore, the order of the Tribunal imposing penalty is not sustainable and accordingly we set aside the penalty and allow the tax revision case." 19. On a careful and anxious scrutiny of the entire facts in the instant case before us, we do find that there is absolutely no real basis for rejection of the accounts maintained by the revision petitioner herein, and there is also no ground warranting for a "best judgment assessment". In view of the decision arrived at by us with regard to this aspect, we do not find any necessity to discuss the second point raised on behalf of the revision petitioner. 20. In the result, we allow the tax revision case and set aside the order of the assessing officer as confirmed by the Appellate Assistant Commissioner and the Tribunal. Under the circumstances, there is no costs. 9. The respondents have clearly stated in the assessment order the gross profit earned has been taken as 54.91% along with 15% which is not on rational basis. As held in the judgment stated supra even a best judgment assessment cannot be a wild guess but a reasonable and justifiable guess at least based on some material. In the present case the respondents....