SANGEETA EXPORTS P LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) BY way of present writ petition, the petitioners have challenged the impugned order dated 2nd November, 2007 passed under Section 279 of the Income tax Act, 1961 (for short as "act") passed by the Chief Commissioner of Income tax, Delhi-III, vide which the petition filed by the present Petitioners for compounding the offence under Section 271c (1)/277 of the Act was rejected. It has been prayed in the present writ petition that this Court should issue writs/orders/directions in the nature of certiorari quashing the impugned order and also issue appropriate writs/orders/directions in the nature of mandamus directing the Respondent-Chief Commissioner of Income Tax, Delhi-III to pass final orders for compounding the offence, subject to the petitioners depositing the composition fee of Rs. 3,98,830/- in terms of the Respondent"s own order dated 13th February, 2007.

(2.) THE brief facts leading to dispute are that the petitioner company (which is a registered private limited company and which since 1984 has stopped functioning) filed its Income Tax Return on 16th August, 1984, claiming a loss of Rs. 69,402/ -. The said return was verified by petitioner No. 2 in his capacity as its Director. The return was accompanied by Profit and Loss Account and balance-sheet as on 30th June, 1982. In the P and L Account, the accused company declared a gross income of Rs. 4, 01,775/- and claimed expenses under various heads totaling Rs. 4, 71,177/ -.

(3.) UPON scrutiny, it was alleged by the Income Tax Officer that the petitioner no. 1 had mis-declared a sum of Rs. 11,00,000/- received as "sub commission" for sales as "advances" against certain contracts amounting to Rs. 7,33,334/ -. The Income Tax Officer summoned the petitioners and directed them to produce books of account, receipts and other documents. The books of account were produced and examined by the Income Tax Officer (which he admits in his cross-examination ). Some other documents demanded by him were also produced, but since on 3rd January, 1986, the car in which the said documents, including books of account, were lying was stolen from the Connaught Place parking lot (the FIR lodged by the petitioners was shown to the Income Tax Officer and brought on record), the accused petitioner failed to produce them again.