079-NLR-NLR-V-62-W.-I.-S.-FERNANDO-Appellant-H.-A.-MITRASENA-Assessor-Department-of-Inland-Re.pdf
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Fernando v. Mitrasena
1960Present : T. S. Fernando, J.W. I. S. FERNANDO, Appellant, and. H. A. MITRASENA(Assessor, Department of Inland Revenue), Respondent
S. C. 995—M. C. Colombo, 17978/B
Income tax—False statement in return made by assesses—Return not one requiredto be made by the Ordinance—Scope of assessee's liability—Income Tax Ordi-nance (Cap. 188), 88. 54 (1), (3) ; 64 ; 87 (1) (6).
An assesses, who had furnished in April 1953 a return of his income for theyear of assessment 1952/53 as required by the Income Tax Ordinance and beenassessed thereon and paid the tax due on the assessment, sent anotherreturn in May 1954 in respect of the same year of assessment as a result of arequest made by the assessor that another return be furnished as the earlierreturn had been lost in his (the assessor’s) office.
The assessee was charged with making a false statement in a return madeunder the Ordinance, viz., the return furnished in May 1954.
■ Held., that, as there was no provision of law which enabled the assessor to callfor another return from a person who had already furnished a return as requiredby the Ordinance, been assessed thereon and had paid the tax on such assess-ment, the return made in May 1954 was not one required to be made under theOrdinance, and therefore was not one made -under the Ordinance within themeaning of section 87 (1) (6).
T. S. FERNAllfDO, J.—Fernando v. Alitrasena
429
PPEAL from a judgment of the Magistrate’s Court, Colombo.
O.T. Sa/merausichreme, with It. JBandaranayahe, for the accused-appellant.
P.Colin Thome., Crown Counsel, for the Attorney-General.
Cur. adv. vult.
August 9, 1960. T. S. Fernando, J.—
The accused-appellant was charged in the Magistrate’s Court on thecharge reproduced below :—
“ That you did, witliin the jurisdiction of this Court at Colombo>between the 30th day of March 1954 and 27th day of May 1954, wilfullywith intent to evade tax make a false statement or entry in the returnfurnished by you under the Income Tax Ordinance for the year ofassessment 1952/53, to wit, by stating therein that your income fromleasehold fibre mill, to wit, St. Mary’s Fibre Mill, Wennappuwa, wasRs. 19,10S/05 whereas in fact such income was more than the said sumand have thereby committed an offence punishable under Section87 (1) (5) of the Income Tax Ordinance (Cap. 1S8). ”
After trial, the learned Magistrate convicted the appellant and sentencedhim to pay a fine of Rs. 750. The appeal has been pressed both onfacts and on law. In regard to the appeal on the facts, it is sufficient toobserve that it is not possible for this Court to hold either that there wasnot adequate material before the learned Magistrate to warrant hisfinding that the appellant had understated his income from the fibremill in question or that in reaching that finding he has misdirectedhimself.
The question of law raised is that the return in respect of which thecharge was framed was not a return made under the Income TaxOrdinance and therefore does not attract the penalties specified in Section87 of the said Ordinance. To appreciate the point of law raised it isnecessary to state the facts involved in its consideration and examine therelevant provisions of the Ordinance.
Section 54 (1) enables an assessor to give notice in writing to any personrequiring him to furnish within the time limited by such notice a returnof his income containing such particulars and in such form asmay be prescribed. It is admitted that the return in respect of theyear of assessment 1952/53 was called for from the appellant andwas furnished by him in April 1953. On the basis of this returnthe assessor acting under Section 64 assessed the tax payable bythe appellant and this tax was duly paid. In 1954 the assessor
430T. S. FERNANDO, J.—Fernando v. Mitrasena
received from a third party certain information which promptedhim to make investigations into the income of the appellant, and in thecourse of these investigations the assessor discovered that the returnmade by the appellant for the year of assessment 1952/53 as well as theentire departmental file relating to the assessments of the appellantwere missing. It is not doubted, however, that the assessment wasmade, and presumably the tax was paid, at a time anterior to the lossof the file. Upon the discovery of the loss, the assessor, to use his ownwords, “ requested the appellant to send another return The appellantthereupon on 27th May 1954 sent the return PI to which the chargerelates. In the course of his evidence the appellant stated that Pi was acopy of the return he had furnished earlier, viz. in April 1953. Anadditional assessment was served upon the appellant after he furnishedPI and although he made successive appeals against this additionalassessment, first to the Commissioner and then to the Board of Review,he was unsuccessful and finally paid the tax due on the additionalassessment as well.
Mr. Samerewickreme’s argument is that, notwithstanding that theappellant has paid the tax due on the additional assessment, there was noprovision of law which enabled the assessor to call for another returnfrom a person who had already furnished a return in terms of the Ordin-ance, been assessed thereon and had paid the tax due on the assessment.Inasmuch as Section 87 (1) penalises the making of a false statement orentry in a return made under the Ordinance, he contends that to constitutea return one that is made under the Ordinance it must be one that isrequired to be made under the Ordinance. This contention appears to meto be well founded, and Crown Counsel, in an attempt to meet it, soughtto clothe with legal sanction the request made by the assessor for anotherreturn sometime in 1954 after tax had been assessed and paid in 1953on the original return by pointing to Section 54 (3) of the Ordinance.That provision of law enables an assessor to call for " fuller or furtherreturns ** respecting any matter for which a return is required or pres-cribed by the Ordinance. In view, however, of the assessor’s ownevidence in this case that what he called for from the appellant in 1954was another return because he discovered the original was lost, CrownCounsel was constrained to concede that this request could not be relatedto an exercise of the assessor’s power under Section 54 (3) which appearsto be limited to obtaining information and material in the shape of detailsand particulars of entries appearing on returns already received or byway of supplying omissions in such returns. No other provision of theIncome Tax Ordinance was relied on as empowering the assessor to requirethe appellant to make the return PI. I am therefore compelled, some-what regretfully, to reach the conclusion that Pi was not a return requiredto be made under the Ordinance and, for that reason, cannot be consideredto be a return made under the Ordinance. In this view of the matter,even a belief by the assessor that he was entitled to call for another returnfor the year of assessment 1952/53 and a corresponding belief on the
T. >S. FERNANDO, J.—Don Lazarus v. Waas
431
part of the appellant that he was in law obliged to comply with the requestof the assessor cannot have the effect of rendering the return actuallyfurnished, one made under the Ordinance. In these circumstances theconviction has to be quashed and a direction made that the appellant beacquitted.
Before parting with this case, I should like to observe that the appellantstated in evidence that the return PI was but a copy of the return madein April 1953. If the point that has been raised by Mr. Samerewiekremehad been appreciated at the trial, it might have been possible for theprosecution, on the strength of this admission in evidence by the appellant,to have sought an amendment of the charge so as to relate the offenceto the making of a false statement or entry in the original return madein April 1953. If such an amendment had been allowed, Pi could havebeen relied on as evidence of the nature of the false statement or entrj'made in the original return. Such an amendment of the charge nothaving been sought, the charge remained one in respect of an offencecommitted in 1954 and could not therefore have been related to an offencein respect of a return required to be made under the Ordinance.
Appeal allowed.