PARKAR J S Vs. PALEKAR V B

JUDGEMENT

(1.) FACTS giving rise to this application under articles 226 and 227 of the Constitution are few and simple, though the case appears to involve great hardship and consequently calls for close scrutiny and analysis. The petitioner (assessee) was carrying on business of transporting iced fishes, mangoes and other goods by sea from Konkan ports to Bombay. He was the owner of a launch 'Lakshmi'. On 24th April, 1961, the Central Excise authorities seized 4,999 biscuits of gold weighing 10 tolas each from the said vessel. The Collector of Central Excise investigated the case and ultimately confiscated the gold so seized by order dated September 18, 1961. The assessee and some others were then tried before the Special Judicial and Additional Chief Presidency Magistrate, Bombay, for offences under section 120B of the Indian Penal Code and section 167(81) of the Sea Customs Act, 1878, and section 23 of the Foreign Exchange Regulation Act of 1947. At the conclusion of the trial the assessee and some other accused were convicted by the learned Magistrate for these offences on July 22, 1963. The said convictions and sentences were confirmed by this High Court on August 11, 1964. Appeal of the assessee and others to the Supreme Court in Criminal Appeal No. 233 of 1964 was ultimately dismissed by the said court on 6th November, 1968.

(2.) IN the meanwhile, the assessee submitted his return of income for the year 1962 -63 on September 1, 1962. Therein he disclosed his income from property, share of profit from the firm of Messrs. Parkar Navigation and Company, Messrs. Deogad Fisheries and Messrs. Parkar Brothers. He also disclosed his salary income which he received from Messrs. Parkar Navigation Company and dividend income of his shares. In response to the notice of the Income -tax Officer, 'B' Ward, Kolhapur, under section 143(2) of the Income -tax Act, 1961, the assessee appeared before the said officer through his advocate and produced before him cash book and ledger. In the course of the assessment proceedings, the Income -tax Officer seems to have learnt about the seizure of gold to the tune of 49,990 tolas from the assessee's launch on 24th April, 1961, and conviction of the assessee along with others before the Special Magistrate. The assessee, therefore, appears to have been called upon to explain the possession of such gold and the sources of money that was required for investment in such huge quantity of the gold. The assessee seems to have submitted his statement in short on July 27, 1966, in the form of a letter. The sum and substance of the contents of his say in this letter is that the criminal case against him then was pending before the Supreme Court and that he was falsely involved in the case and the witnesses examined in the said trial had given false evidence. He concluded his letter saying :

(3.) THE Income -tax Officer then passed assessment order dated February 13, 1967, assessing the total income of the assessee under section 143(3) of the Income -tax Act to the tune of Rs. 70,98,834, Rs. 70,78,584 having been added towards income by way of 'investment in acquisition of gold as income from undisclosed sources as discussed above'. He referred the question of penalty to the I. A. C., P. R. II, Poona. On appeal by the assessee to the Appellate Assistant Commissioner the findings recorded by the Income -tax Officer were virtually confirmed. However, the value of the gold involved in the alleged investment was reduced from Rs. 70,78,584 to Rs. 47,19,056. He directed penal proceedings to be initiated separately under section 271(1)(c) of the Income -tax Act. As a result of the slight relief granted in appeal the total income was reduced by Rs. 23,59,528. The assessee's appeal to the Income -tax Appellate Tribunal was dismissed on 9th March, 1970. The assessee then seems to have made an application for reference to the High Court under section 256(1) in regard to certain questions of law referred to in Paragraph 21 of the Tribunal's order. This application was rejected by the Tribunal on 10th February, 1971. Instead of making an application to the High Court under section 256(2) of the Income -tax Act, the petitioner has filed this writ petition under articles 226 and 227 of the Constitution to this court on 15th June, 1971.