K V PRODUCE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) PETITIONERS seek to quash Ext. P4 order of first respondent CIT rejecting their request for amnesty. Directions to respondents to accept a return filed by petitioners dt. 21st March, 1987 and to withdraw C.C. No. 62 of 1987 on the file of the Addl. Chif Judicial Magistrate, Ernakulam, are also sought.

(2.) PETITIONERS returned an income for Rs. 2,64,090 for the asst. yr. 1983-84. An assessment Ext. R2 dt. 7th Jan., 1986 was made, rejecting the return filed and adding a suppressed income of Rs. 1,47,888 petitioners appealed against that order unsuccessfully. The appeal was rejected on 5th Nov., 1986 by Ext. R2 (a). Thereafter, a second appeal was filed before the Tribunal.

(3.) PETITIONERS submit that the scheme covers past years also, and that they had acted on a promise contained in the circular. The Revenue cannot go back on the promise or initiate penal proceedings thereafter, state petitioners Question Nos. 9,12,.19 and 28 and the answers thereto in Ext. R 2(b) are relied on by petitioners to contend that the benefits under the scheme are available to them. They submit that the circular has the force of law and, thus, the penal provisions of the IT Act,. 1961 (the act) cannot be invoked against the assessee covered by the scheme and relying on the decision in CIT vs. Punalur Paper Mills (1987) (2) KLT 194, the counsel for petitioners would submit that the circular 'supplants the law, instead of supplementing it.'