P. Govindan Nair, C.J.
1. In this tax revision case, the only question to be considered is whether the confirmation of the decision taken by the Appellate Tribunal in the appeal taken by the assessee before it from the order of assessment by the assessing officer passed for the second time, after he reopened the earlier assessment, by which he imposed a penalty under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959, requires to be revised under Section 38 of the same Act. The section speaks of erroneous decision of a question of law or a failure to decide a question of law. As far as we can see, there is no such error in the order of the Appellate Tribunal. The assessing officer no doubt stated in relation to the objections raised by the assessee for the proposed reopening of the assessment:
The objections were considered. The slips and account books, etc., were examined. Thiru Rajagopal who had very good knowledge of the business had spoken and deposed before the Special Deputy Commercial Tax Officer (ITW) as to the facts of the case. Only on the basis of the above examination, proposals for revision of assessment were made. The outstandings of credit of cash sales as presumed and explained by the assessee has not been correlated in the absence of which the explanation cannot be accepted. It is admitted that there had been omissions of sales in the bills 8, 9, 12, etc. It is admitted that slip No. 86 contains sales of empty tins. The entries made in the chittal cannot be proved that the transactions contained in the chittal have already been brought to accounts. The outstandings of such unaccounted transactions is admitted to have been effected for Rs. 24,034.95. The purchase of blackgram, etc., are also admitted. The revision of assessment is warranted in the face of suppressions. The penalty has been proposed to be levied on the actual suppression.
2. The assessee appealed and the Appellate Assistant Commissioner dealt with the matter in his assessment order and observed :
As regards the levy of penalty, the observation of the assessing officer both in the pre-revision notice and in the order of revision is as follows:
'It was also proposed to levy a penalty of Rs. 1,650.00 under Section 16(2) being 1 1/2 times the tax due on the actual suppressions noticed.'
I went through the assessment file and I do not find that the assessing officer has anywhere recorded his finding that there has been a wilful nondisclosure of turnover. Though the appellants have raised this point as one of the grounds in the appeal memo, when the assessing officer was asked to offer his remarks on the grounds of appeal, he has not chosen to state anything as regards the contention of the appellant. I therefore find that there is no finding by the assessing officer on record that the escapement of turnover was as a result of an overt culpable act on the part of the appellant. In the absence of such a finding, I am unable to uphold the levy of penalty under Section 16(2).
3. It was this decision of the Appellate Assistant Commissioner that had been upheld by the Tribunal. The Appellate Assistant Commissioner has decided the matter in accordance with law. It is useful to remember that a section providing for penalty is penal in nature. The fact that the explanation of the assessee cannot be found to be acceptable by the assessing authority and, therefore, the assessing authority rejected his explanation and added to the turnover, which is justified, in the proceedings which was adopted by the assessing authority, would not by itself afford a necessary ingredient of a wilful non-disclosure of an assessable turnover. There must be something more tangible. Something far more concrete is required which would indicate that the assessee has got the mental element which is called mens rea and that is insisted by the section by the use of the words 'wilful non-disclosure of assessable turnover'. It may be that it is often difficult to establish this element when the penalty is imposed; but that is of no moment, for, penalty can be imposed under Section 16(2) if the ingredients of the section are made out. As we said earlier, we see no error in the order of the Appellate Tribunal. We dismiss this revision with costs. Counsel's fee Rs. 250.