1. For the assessment year 1964-65, the assessee in this case was assessed on a certain turnover in respect of his dealings in certain commodities. But, only a turnover of Rs. 42,470 was disputed before the Tribunal. The said turnover represented the addition made by the assessing authority to the turnover returned by the assessee on the ground that there were certain defects found in the assessee's accounts. The assessee explained those defects, but the assessing authority did not accept his explanation. When the matter came before the Tribunal, the Tribunal also found that, in fact, the various defects pointed out by the assessing authority have not been duly explained and, therefore, the addition towards the probable suppressions was justified. But, having regard to the facts and circumstances of the case, the Tribunal felt that the addition of Rs. 42,470 is not justified, but the addition should be reduced to a turnover of Rs. 15,000. In this view, the Tribunal deleted the excess addition of Rs. 27,470. The Tribunal also set aside the penalty of Rs. 100 levied by the assessing authority under Section 12(3) of the Madras General Sales Tax Act on the ground that there is no proof that the assessee, with a view to suppress the turnover and evade payment of tax, failed to disclose the same in the returns. Aggrieved against the order of the Tribunal, the revenue has come up before us.
2. It is contended on behalf of the revenue that the Tribunal, having held that in view of the defects pointed out, the addition towards suppressions is justified, erred in reducing the addition to Rs. 15,000 and that there is no basis for restricting the addition to the said sum of Rs. 15,000. But, we are not inclined to accept the said contention. The Tribunal has given various reasons as to why the addition made by the assessing authority in a sum of Rs. 42,470 is excessive. The Tribunal has taken note of the defects pointed out and also the other facts and circumstances for reducing the addition to Rs. 15,000. On the facts, we do not see any justification for interfering with the estimate made by the Tribunal in this case.
3. It is then contended by the revenue that the Tribunal is not justified in setting aside the order of penalty. It is stated that the Tribunal having upheld the best judgment assessment, it should confirm the order of penalty levied under Section 12(3). We are of the view that there is force in this contention. The Tribunal has given various reasons in the earlier part of its order as to how the addition of Rs. 15,000 is justified. Having upheld the best judgment assessment passed by the assessing authority, the Tribunal cannot say that the assessing authority is not justified in invoking the power under Section 12(3) of the Act and levying the penalty. On the facts of the case, the Tribunal's observation that there is no proof of suppression with a view to evade payment of tax and, therefore, the penalty is not justified, cannot be sustained. Admittedly, the return submitted by the assessee had been found to be incorrect and a best judgment assessment has been made in the case. This straightaway attracts the provision of Section 12(3). We are not inclined to agree with the contention advanced by the learned counsel for the assessee that a finding that the suppression was wilful is necessary for the purpose of invoking Section 12(3), even though the said provision does not, in terms, require such a finding. In this view of the matter, we have to set aside the order of the Tribunal in so far as it relates to the levy of penalty and the order of the assessing authority levying a penalty of Rs. 100 is restored. The tax case is allowed in part. There will be no order as to costs.