K V PRODUCE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioners in O. P. 6942/1987 are the appellants. The first appellant is a partnership firm. The second appellant is one of the partners of the first appellant firm. Third appellant is the Manager and .Power of Attorney Holder of the first appellant firm.

(2.) The matter arises under the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The 1st appellant. firm was mainly engaged in the business of purchase and sale of copra inside and outside the State. For the assessment year 1983-84, the relevant accounting period ended 31st March 1983, the firm filed a return declaring an income of Rs. 1,04,951. The Income Tax Officer completed the assessment on a total income of Rs. 2,64,090 by making an addition of Rs. 1,47,888 to the returned income. Aggrieved by the said assessment order, the firm filed appeal before the Commissioner of Income Tax (Appeals), Calicut. The appeal was dismissed and the assessment was confirmed. The firm filed a second appeal before the Income Tax Appellate Tribunal, Cochin Bench, Ernakulam. During the pendency of the said appeal the firm filed a revised return for the year 1983-84 declaring the assessed income of Rs. 2,64,090 as the total income. This revised return was filed along with a covering letter, dated 21st March 1987 (Ext. P - 2) addressed to the Income Tax Officer, A Ward, Circle I, Calicut. It is specifically stated in the said covering letter that this revised return is filed under the Amnesty Scheme and that the appeal filed before the Income Tax Appellate Tribunal, Cochin Bench, Ernakulam has been withdrawn and a letter to that effect is enclosed. The firm had also requested that the tax of Rs. 13428 payable as per the revised return may be adjusted from the refund that is due for the assessment year 1981-82. The firm sought for grant of immunity from penal proceedings under the provisions of the Income Tax Act, 1961 in terms of the Amnesty Circulars issued by the Central Board of Direct Taxes. The Department, however, initiated prosecution proceedings by filing C. C. No. 62/1987 before the Additional Chief Judicial Magistrate's Court (Economic Offences), Ernakulam against the firm. The firm then filed a petition (Ext. P - 3) before the Commissioner of Income Tax, Ernakulam seeking to withdraw the prosecution proceedings pending before the Additional Chief Judicial Magistrate's Court, Ernakulam as C. C. No. 62/1987. The Commissioner of Income Tax issued a communication, dated 20th May 1987 (Ext. P - 4) to the firm stating that this is a case in which the Income Tax Officer has established concealment of income and completed the assessment accordingly, that the C. I. T. (A), Calicut in appeal confirmed the same and that in the circumstances there is no question of any disclosure under the Amnesty Scheme for the same amount now. The request made by the firm was accordingly rejected. The firm challenged the Ext. P - 4 Order passed by the Commissioner in the O. P. They sought for direction to the respondents to accept revised return filed along with the covering letter Ext. P - 2 as one filed under the Amnesty Scheme and to dispose of the return applying Circular No. 450(Ext. P1) issued under the Amnesty Scheme. They also sought for direction to the respondents to withdraw the criminal case as C. C. No. 62/1.987 filed before the Additional Chief Judicial Magistrate's Court.

(3.) Respondents filed a counter affidavit in the O. P. The averment.; in the said counter affidavit are summarized as follows: