RAMACHANDRAN AND CO Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner, which is a firm, was doing business as abkari contractors during the accounting year ending March 31, 1984. THE return for purposes of the Income-tax Act, 1961 ("the Act"), for the corresponding assessment year 1984-85 was due on July 31, 1984, but the petitioner sought for extension of time till March 31, 1985, and filed the return one year later on March 31, 1986, disclosing a total income of Rs. 4,43,370. THE Income-tax Officer started investigation on receipt of the return and called for various details and particulars from the petitioner by his letter, exhibit R-1(a), dated December 1, 1986. While the proceedings were thus going on, the petitioner purported to take advantage of the Amnesty Scheme of 1985 and filed a revised return disclosing a total income of Rs. 8,39,810 for the year. That was on March 12, 1987. THE Income-tax Officer was not, however, satisfied with this return as he was of opinion that the petitioner had disclosed a lesser value for the arrack sold by it during this year than in the previous year, and for other reasons. He made addition to the total income returned, besides disallowing certain items of expenditure claimed. THE taxable income for the year was thus determined at Rs. 15,58,078 by the order, exhibit P-1, dated April 1, 1987. Apart from demanding tax on this income, a demand was also made for Rs. 2,46,102 by way of interest under Section 139(8), Rs. 1,53,634 as interest under Section 215 and Rs. 344 by way of interest under Section 216.

(2.) THE petitioner challenged this order in appeal and simultaneously applied by exhibit P-4 dated May 4, 1987, to the Income-tax Officer for waiver of the interest demanded. THE Income-tax Officer rejected this request for waiver of interest by his reply, exhibit P-5, dated May 15, 1987, on the ground that the partners of the petitioner firm had not made corresponding disclosures and payment of tax. THE petitioner carried this order (in so far as it related to the interest under Sections 139(8)(and 215) in revision before the Commissioner of Income-tax by the revision petitions, exhibits P-6 and P-7.

(3.) THE petitioner has no case that it is entitled to any waiver by virtue of Rules 40 and 117A of the Income-tax Rules, 1962. THE reliance is only on the fact that a return was filed purporting to be under the Amnesty Scheme and, therefore, no interest may be charged. This contention does not stand scrutiny for the reasons that the return for the year was due on July 31, 1984, extension was sought till March 31, 1985, and the return was filed one year later on March 31, 1986. This return admittedly did not disclose the income truly or fully. It was only after the investigation started and the process of assessment was going on that the revised return purporting to be under the Amnesty Scheme was filed on March 12, 1987. Even this return was not accepted and eventually after the order in appeal, the taxable income stood enhanced by an amount of Rs. 50,000. THE Amnesty Scheme postulates a voluntary and true disclosure of his income by an assessee for the benefits thereof being given to him. In this case, the revised return was evidently prompted by the investigation that was going on and was made almost on the eve of completion of the assessment, namely, on March 12, 1987, the date of assessment being April 1, 1987. THE return so filed was neither true nor complete as evident from the enhancement of the taxable income by Rs. 50,000 even as per the appellate order, which the petitioner accepted and did not challenge in further appeal. THE revised return was thus not a true return and, therefore, the petitioner became disentitled to the benefits of the Amnesty Scheme. I am in agreement with the reasoning of the Commissioner on this point in the order, exhibit P-8.