COMMISSIONER OF INCOME TAX Vs. PRABHAT BAKERY

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Madras Bench, has referred the following question relating to the year of assessment 1967-68 for the opinion of this court:

(2.) THE assessee had first filed a return showing an income of Rs. 20,899 on the turnover of Rs. 5,19,616. This works out to 12.6 per cent. of the gross profit as seen from the books of account. THE assessing authorities felt that both the turnover as well as the percentage of profit were too low. THE turnover was, therefore, fixed at Rs. 6,79,364 and the percentage of profits was fixed at 18 per cent, with the result, the income-tax to be assessed was determined as on the income of Rs. 66,460. THE tax was imposed on that figure. THE assessment order has been accepted by the assessee, no appeal having been taken from the order of assessment. Penalty proceedings were then commenced against the assessee under Section 271(1)(c) of the I.T. Act, 1961, which states:

(3.) THE Tribunal observed in the concluding paragraph of its order thus: