KAMALA VATI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) ON March 17, 1970, the assessee made a voluntary disclosure of income of Rs. 1,30,000 which was allowed to be spread over equally over the four assessment years 1961-62, 1962-63, 1963-64 and 1964-65. For the assessment year 1961-62, the assessee had not filed a return of income on the ground that she had no taxable income. She had not filed any estimate of advance tax to be paid by her under Section 18A(3). After the settlement pursuant to the voluntary disclosure, she filed a return on March 25, 1970, for the assessment year 1961-62, showing an income of Rs. 450 from house property and an income of Rs. 32,500 disclosed by her under the settlement. The Income-tax Officer levied a penalty of Rs. 3,608 under Section 271(1)(a). For the assessment year 1964-65, the assessee had filed an estimate of advance tax showing an income of Rs. 36,800 and the tax payable by her as Rs. 10,700. Thereafter, she filed a return showing her income as Rs. 35,615. After the settlement, pursuant to the voluntary disclosure, the Income-tax Officer completed the assessment for the assessment year 1964-65 on a total income of Rs. 1,70,298. Penalty of Rs. 7,660 was levied on her under Section 273(a) for the assessment year 1964-65. The Income-tax Appellate Tribunal has referred for our decision the following questions :

(2.) ON the first question, Shri Bhagirath Dass, learned counsel for the assessee, submitted that the revenue had failed to establish any mens rea on the part of the assessee and, therefore, no penalty could be levied on her. There is no substance in the submission. ON her own showing the assessee had failed to furnish a return of her income for the assessment year 1961-62 without reasonable excuse. That was sufficient to attract Section 271(1)(a). The doctrine of mens rea has no application to such situations under taxing statutes. The decision of the Andhra Pradesh High Court in Additional Commissioner of Income-tax v. Narayanadas Ram Kishan [1975] 100 ITR 18 has since been overruled by a Full Bench. (See Addl. Commissioner of Income-tax v. Dargapandarinath Tuljayya & Co. [1977] 107 ITR 850 (AP) [FB]).

(3.) WE find it difficult to accept the submission of Shri Awasthy in the face of the definition of the expression "regular assessment" in Section 2(40) of the 1961 Act. It is true that in Deviprasad Kejriwal v. Commissioner of Income-tax [1976] 102 ITR 180, the Bombay High Court considered the expression "regular assessment" occurring in Sections 18A(5), 18A(6) and 18A(9) of the 1922 Act, to include assessment under Section 34 of that Act but we notice from a perusal of the decision that there were two earlier decisions under the 1922 Act, one of the Bombay High Court in Sarangpur Cotton Manufacturing Co. v. Commissioner of Income-tax [1957] 31 ITR 698 and the other of the Madras High Court in Natarajan Chettiar v. Income-tax Officer [1961] 42 ITR 29, which appear to have interpreted the expression "regular assessment" in a different way. In Natarajan Chettiar's case [1961] 42 ITR 29 (Mad) Rajamannar C.J., after referring to the decision of Chagla C.J. in Sarangpur Cotton Manufacturing Co. v. Commissioner of Income-tax [1957] 31 ITR 698 (Bom), proceeded to hold that an assessment made under Section 34 was not a regular assessment. He observed (page 31) :