G C SHARMA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner herein Shri G. C. Sharma was directed by a notice dated 29th April, 1059 issued under section 22(2) of the Income-tax Act, 1922 (heareinafter referred to as the Old Act) to file his return of income for the assessmentyear 1959-1960. the relevant previous year, being the year ending 3 1/03/1959. In compliance with this Ilnotice the petitioner filed thereturn on 28/07/1962 declaring an income of Rs. 43,253.00. Duringthe course of the assessment proceedings, it was found that the petitioner had claimed allowance for an expenditure of Rs. 18,000.00 representing .payment made to Modern Sanitations which accordi: g to the petitioner was an expanditur incurred solely and exclusively for the purpose of the petitioner's business. The petitioner also filed some documents by way of evidence in support of this claim. The Income taxOfficer was of the view (i) that the petitioner's claim was false (ii) thatthe petitioner had in fact not made any payment of Rs. 18,000.00 toModern Sanitations (iiij that the documents filed by the assessee insupport of this claim were fabricated by him and (iv) that the petitioner was not entitled to the deductions claimed by him in computing hisincome. The assessment was made on a total income of Rs. 82,000.00.This assessment was made on 30/03/1964 under section 143(3) ofthe Income-tax Act, 1961 (hereinafter referred to as the New Act).While completing the assessment the Income-tax Officer also directedthe issue of a notice under section 274 read with section 273 of the NewAct and section 274 read with section 271 of the New Act to the petitioner. As in the opinion of the Income-tax Officer the minimumpenalty impossable against the petitioner exceeded a sum of Rs. 100.00he referred the assessee's case to the inspecting Assistant Commissionerunder section 274 of the Act.

(2.) . While these proceedings under sections 274 read with section273 of the New Act and section 274 read with section 271 of the NewAct were pending before the Inspecting Assistant Commissioner theIncome Tax Officer also filed a complaint against the petitioner in theCourt of the Sub Divisional Magistrate New Delhi under section 277 of theNew Act and under section 193, 467 and 471 of the Indian Penal Code.It is these Criminal Proceedings pending in the court of the Sub Divisional Magistrate, New Delhi that the petitioner seeks to challenge inthis petition filed under Articles 226 and 227 of the Constitution ofIndia.

(3.) It may also be stated at this stage that the petitioner hadfiled an appeal before the appellate Assistant Commissioner againstthe assessment order passed by the Income-tax Officer on 30/03/1964 in respect of the assessment year 1959-60. That appeal is stillpending. As already stated, by the time the petitioner filed the pre-sent petition before this Court, proceedings under S. 274 read withS. 273 of the New Act and S. 274 read with S. 271 of the New Actwere still pending. But subsequent to the filing of this petition itwould appear that the penalty proceedings under S, 274 read withS. 273 of the New Act were dropped and the proceedings under S. 274read with S. 271 of the New Act were disposed off and the InspectingAssistant Commissioner levied a penalty of Rs. 28,000.00 against thepetitioner under S.271(l)(c) of the New Act. The petitioner preferredan appeal to the Income-Tax Appellate Tribunal ? gainst this order ofthe Inspecting Assistant Commissioner and while confirming the levyof the penalty the said Tribunal reduced the quantum of the penaltyto Rs. 10,000.00. The petitioner did not file any reference applicationeither before the appellate Tribunal or before this Court against thesaid order of the Appellate Tribunal. The said order of the Tribunallevying a penity of Rs. 10,000.00against the petitioner under S. 271(1 )(c) ofthe New Act has, therefore., become final. As a matter of fact the pet-itioner is not seeking to challenge the said order of the Tribunal in thepresent writ proceedings. As already stated it is only the Criminalproceedings in the court of the S.D.M. New Delhi that are being challenged by the petitioner.