K E SUNIL BABU ASST COMMR OF INCOME TAX Vs. STEEL PROCESSORS BANGALORE COOPERATIVE INDUSTRIAL ESTATE SRI KEWAL GUPTA MAJOR

JUDGEMENT

(1.) THE account books of A. 1 to 3 disclosed a sum of Rs. 100000/- as loan from A. 4. Accordingly, the returns were filed by A. 1 to 3 for the assessment period 1986-87. The tax authorities conducted search of the premises of A. 4 and found that there is no corresponding entries in the accounts of A. 4 to corroborate the loan of Rs. 100000/- to A. 1 to 3. A. 4 was not able to substantiate the source, hence stated to the income tax authority that the entry is a false entry relating to loan from A. 4 shown by A. 1 to A. 3. The income tax accepted the version of A. 4. The income tax authorities issued notice to A. 1 to 3 for submitting false return. A1 to 3 filed revised returns Under Section 139 (5) of the Income Tax Act. The revised return is accepted. Accordingly, the tax liabilities have been recovered. Later on the department launched prosecution of A. 1 to 4 for committing offence Under Section 276 (c), 277 read with Section 278 of the I. T. Act. The provisions of Section 139 (5) reads thus: 139 (5) If any person, having furnished a return under Sub-section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier:

(2.) THE provisions of Section 276 (c), 277 and 278 reads thus: 276-C. Wilful attempt to evade tax etc. ,- (1) If a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or impossible under this Act, he shall, without prejudice of this Act, be punishable,

(3.) THE assessee is permitted to file revised return if there is any bonafide mistakes in the returns filed. The assessing authority upon proof of the bonafide reasons can accept the revised return and pass necessary orders in accordance with law. The revised returns are accepted by the authorities. Yet the department notwithstanding acceptance of the revised return Under Section 139 (5) has launched prosecution against the accused for the offence Under Section 276 (c), 277 and 278.