APPAVOO PILLAI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to us under S. 66(2) of the Indian Income-tax Act is:

(2.) EVEN in the appeal before the Appellant Assistant Commissioner, no figures to justify the computation of the estimate made by the assessee were made available. The Appellate Assistant Commissioner upheld the imposition of penalty.

(3.) BUT the more important question is whether the assessee is not bound in a proceeding under S. 18A(9) read with S. 28, to satisfy the Income-tax Officer that he had reasonable belief in computing his income at the figure of his estimate. The disparity between the estimate and the finally assessed figure is so great that the assessee's mere statement that he thought and that it was made honestly cannot be accepted as it stands. As was pointed out in the case referred to, the assessee is expected to make an honest estimate, and he can do so only on the basis of the accounts of that part of the year which were available with him as on the date of the estimate. Both the Income-tax Officer and the Appellate Assistant Commissioner have pointed out that the basis upon which the assessee reached his estimate was not made known to them at all. It is true that before the Tribunal a statement giving the date for the estimate was filed. BUT the Tribunal was not prepared to attach any weight to this statement as furnishing the property basis for the estimate and expressed its view that the statement is an afterthought. The fact accordingly is undisputed that the assessee was not able to show how the estimate was justified by the state of accounts as they stood on the date of the estimate.