Sabyasachi Mukharji, J. - (1.) The assessment year involved is 1961-62. The assessee is a private limited company and the reference relates to the assessment year 1961-62. For this assessment year, the assessee-company instead of paying advance tax of Rs. 21,838 as demanded by a notice dated June 13, 1960, filed an advance tax estimate on January 11, 1961, showing the estimated total income at Rs. 5,500 and the advance tax payable thereon at Rs. 2,475. Subsequently, however, the return of income was filed showing a total income of Rs. 9,287 and the assessment was made on a total income of Rs. 55,658 (as revised in appeals). The ITO was, therefore, of the opinion that since the advance tax estimate was filed on January 11, 1961, i.e., after the end of the assessee's previous year on December 31, 1960, and the estimated total income in the advance tax estimate was shown at Rs. 5,500 only, as against Rs. 9,287 according to the assessee's own return of income subsequently filed as against Rs. 55,658, which was ultimately assessed, the advance tax estimated by the assessee was what it knew or had reason to believe to be untrue. He, therefore, imposed a penalty under Section 273(a) of Rs. 7,735.
(2.) Being aggrieved with this imposition of penalty the assessee-company went up in appeal to the AAC, who held that the advance tax estimate was on the same income as the amount shown in the return of income, and the difference between the returned income and the assessed income was not due to any deliberate or conscious suppression of income. He, therefore, cancelled the penalty imposed under Section 273(a).
(3.) The matter thereafter went before the Tribunal. The Tribunal noted the facts, stated hereinbefore, and noted the contentions of the advocates for the contesting parties. The Tribunal was of the view that before Section 273(a) could be attracted, it must be shown that the assessee had furnished under Section 212 of the I.T. Act, 1961, an estimate of advance tax payable by him which he had reason to believe to be untre. Therefore, in order to attract the penal provision of Section 273(a), there must be evidence to show that the estimate of advance tax had been filed by the assessee and that the assessee had reason to believe it to be untrue. The facts of this case have been stated hereinbefore. It is true in this case that the estimate was filed by the assessee at the close of the accounting year. The accounting year closed on the 31st December, 1960. But the estimate was filed by the assessee on 11th January, 1961. The assessee admitted that the assessee filed the return after the expiry of the assessment (accounting year ?)--by the end of June, 1961. There is undoubtedly a difference between the two estimates filed by the assessee after the close of the accounting year and the ultimate return filed by the assessee in respect of the said assessment year amounting to Rs. 5,000 approximately. But this difference was not very substantial in magnitude. But, even then on behalf of the revenue it was contended, on the authority of the decision in the case of Hind Products P. Ltd. v. CIT [1980] 121 ITR 903 (Bom) and in the case of CIT v. Kundanlal, that the assessee must file an estimate which he bona fide believed to be true and correct. It may be so. That proposition we cannot dispute. Before the penal provision of Section 273(a) can be attracted, there must be evidence that the estimate filed by the assessee was false to the knowledge of the assessee or he had reason to believe it to be untrue. Now, the Tribunal has found that there was no such evidence. The fact that in a particular case the estimate was filed at the close of the accounting period did not by itself establish that the estimate which was filed was not only false but also false to the knowledge of the assessee. Now, the question is that before the expiry of the accounting year, one may or may not have a full picture of the result of the income earned in that year. The time for making that calculation comes at the time of the filing of the return. Therefore, unless there was evidence to indicate that 10 days or 12 days prior to or after the close of the accounting period the assessee knew or had reason to believe that the estimate filed by him was false it cannot be presumed, simply because he has filed it after the expiry of the accounting year, that he had such knowledge,;