ROHITKUMAR AND CO Vs. BAHADUR F J CIT

JUDGEMENT

(1.) BY this petition under Art. 226 of the Constitution of India, the petitioner, a partnership firm, has challenged the legality and validity of the order dt. August 4, 1987, passed by the CIT under s. 273A of the IT Act, 1961.

(2.) ON April 30, 1981, when one Shri K. C. Mehta was returning from Delhi with cash of Rs. 22,87,000, the amount was seized from him under S. 132 of the IT Act, 1961. In his statement recorded at the airport itself, he stated that he had received the said amount from four parties At Delhi for delivering the same to a firm, Jamnadas Madhavji and Co., in Bombay for which he was working. On inquiry at Delhi, the departmental authorities, it appears, found that the alleged four parties at Delhi were either non existing or had denied having given any money to the said Shri K. C. Mehta. On May 4, 1981, the petitioner company wrote to the Deputy Director of Inspection (Intelligence) that the amount of Rs. 22,87,000 seized from Shri K. C. Mehta belonged to it, that the amount should not be returned to anybody else including Shri K. C. Mehta and that the petitioner proposed to come forward with a settlement petition offering the entire amount as its income for the asst. year 1981 82. On the same day, Shri K. C. Mehta also wrote to the Deputy Director of Inspection (Intelligence) confirming that the said amount did not belong to him or Jamnadas Madhavji and Co. as was stated by him originally but belonged to the petitioner. He also stated that all the partners in the petitioner firm were his close relatives. On May 9, 1981, the petitioner filed a settlement petition before the CIT offering the said amount of Rs. 22,87,000 as its income for the asst. year 1981 82 and requested the CIT to waive interest and/or penalty leviable/imposable under the Act as the petitioner was making a full and true disclosure of its income voluntarily and in good faith. In view of the said statements of Shri K. C. Mehta and the petitioner, the Deputy Director of Inspection (Intelligence) passed an order on June 22, 1981, releasing the said amount in favour of the said Shri Mehta and simultaneously seizing the same in the hands of the petitioner.

(3.) ASSESSMENT for the year, i.e., 1982 83, was completed on July 30, 1983, computing the total income at Rs. 23,17,801. Interest was charged under ss. 139(8), 215 and 217 of the Act. Penalties under section 271(1)(c) and 273(c) were also imposed. However, the CIT rejected the petitioner's application under S. 273A by an order dt. July 29, 1983, without hearing the petitioner. The petitioner, thereupon, filed a Writ Petition No. 2907 of 1983 in this Court. The petition came up for admission on January 20, 1984, when the order of the CIT dt. July 29, 1983, was set aside at the stage of admission itself and the CIT was directed to dispose of the application under S. 273A afresh after hearing the petitioner.