MALHOTRA V S Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner, an advocate on the rolls of the State Bar Council of Madhya Pradesh, has instituted this writ petition to challenge a disqualification imposed on him under s. 288(4) of the IT Act, 1961. It is necessary for the purposes of dealing with the various questions arising in the case, to first set out some of the relevant facts.

(2.) THE petitioner filed a return of income in relation to the asst. yr. 1958-59 on 3rd September, 1958, in which he estimated his income to be Rs. 5,000. The ITO assessed the income at Rs. 30,000 but on appeal, it was reduced to Rs. 20,000. The ITO also referred the case to the IAC under s. 274(2) of the IT Act, 1961, for the purpose of imposing a penalty on the petitioner under s. 271(1)(c) of the Act, on account of concealment of particulars of his income. A penalty of Rs. 3,000 was imposed on the petitioner thereafter, by an order dated 12th March, 1965. On appeal by the petitioner, the Tribunal, Bombay, affirmed this order. The petitioner sought a reference to the Madhya Pradesh High Court on the ground that s. 297(2)(g) of the IT Act, 1961, was not attracted, but that reference was also unsuccessful. Thereafter, the Addl. CIT, Bhopal, passed an order under s. 288(4) of the Act on 26th February, 1971, disqualifying the petitioner from representing assessees before the IT authorities for a period of two years. The petitioner appealed to the C B D T, but his appeal was rejected by an order dated 21st September, 1971. The petitioner has now challenged the decision of the Addl. CIT, Bhopal, as affirmed by the C B D T on various grounds in this writ petition.

(3.) IT is contended that the purpose of enacting s. 288(4) was not to make the disqualification retroactive in the case of a person appearing before the It authorities. It was meant to be a deterrent for income-tax practitioners in the future, and not as a disqualification for past concealments. By making s. 297(2)(g) of the Act also applicable to s. 288(4) merely by reason of the words "imposed under this Act" appearing in that clause, the effect is to make s. 288(4) retrospective which is a construction which the Court should lean against if possible.