Gangeshwar Ltd. vs Commissioner Of Income-Tax
1991 Latest Caselaw 70 Del

JUDGMENT

1. The petitioner seeks reference of the following questions to this court :

"(i) Whether, in the light of the causes pleaded and circumstances pointed out, any person judicially acting could come to the conclusion that the assessed furnished an estimate which it knew or had reason to believe to be untrue and committed a fault within the meaning of section 273(a) of the Income-tax Act, 1961 ?

(ii) Whether the Tribunal's finding is not vitiated in law owing to their ignoring the most important facts on record specifically brought to their notice during the hearing as under :

(a) That the account books of the company are closed on 31st October of each year and a statement of accounts duly submitted to the Company Law Department on that basis while the returns of income and the estimate of income have to be prepared by adopting the accounting year as ending on 30th June each year and which requires considerable time for getting the bifurcated accounts and which can be done only after the audit of the accounts for the year 31st October is completed;

(b) That the variation in expenses was also explained along with the variation in receipts (pages 3 to 6C of the paper book) ?"

2. It has been contended by learned counsel for the petitioner that the books of account of the company were closed on October 31 each year but the Income-tax Appellate Tribunal has held that the books of account were closed in June, 1977. This is stated to be the mistake committed by the Tribunal. The other contention is that it had given an explanation explaining the difference which had arisen between the estimate filed by the petitioner and the income returned.

3. Counsel for the petitioner is unable to bring to our notice any paper on the record showing that the Income-tax Appellate Tribunal was made aware of the allegation that the books of account were closed on October 31 each year. There is no such mention in the assessment order not in the order of penalty not in the reply to the show-cause notice or in the appellate order. Even in the order of the Tribunal, there is no indication that the books of account had been closed on October 31. The only explanation given by the assessed in its letter of May 24, 1984, in response to the show-cause notice as to why penalty should not be levied, was that some expenses or income could not be anticipated and there were circumstances beyond the control of the assessed which prevented it from giving the correct figures. It was not mentioned therein that the accounts had to be prepared as on June 30, 1977, from the books of account which were closed on October 31, 1977. This explanation was not put forth before the tax authorities. Secondly, in the documents which were filed before the Tribunal giving the explanation with regard to the underestimation of the income, it is only a figure of Rs. 7,76,000 has been mentioned. It is mentioned that this income could not be anticipated.

4. With regard to the other expenses, there is a mention of overestimation and with regard to other incomes, there is mention of underestimation. Merely because there has been an overestimation and underestimation or merely because the Tribunal has referred to a figure of Rs. 7,76,000, it cannot be regarded as an explanation justifying such a variation between the figures of the income returned and the estimate filed.

5. The conclusion of the Tribunal is a pure question of fact and we do not see any question of law. Dismissed.