1980 (1) TMI 111

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lty notice was issued to the assessee. In response to that the assessee submitted that income of the assessee was below taxable limit and that the assessed income became taxable due to the addition of Rs. 14,000 made by the ITO in the trading account wrongly mentioned as cash credit addition by the AAC of the Head Officer as well as Branch Officer on adhoc basis, the assessee filed return at Rs. 6,241 which was below taxable limit. The income being below taxable limit according to the assessee, he was not to file return and, therefore, no default within the meaning of s. 271(1)(a) was committed by the assessee. The ITO did not accept the explanation of the assessee and he observes that "The correct income is that income which is assessed by....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the view that in view of the endorsement made by the assessee on the return it cannot beneficiary said that no bona fide belief was entertained by the assessee that its income being below taxable limit, there was no need to file any return. Simply because the assessee agreed to be assessed at Rs. 20,000, it does not mean from the very outset that income of Rs. 20,000 had actually accrued to it. In reply submitted in response to the show cause notice also the assessee stated that no real income of Rs. 20,000 had accrued to it and that it had simply agreed to beneficiary assessed at Rs. 20,000 "to purchase peace and settle the long drawn process of assessment being continued for over two years". In the circumstances of the case, it cannot ben....