ULCHALA ILLURU HANUMANTHAIAH Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is a petition under article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records relating to the notice of attachment dated February 21, 1958, issued by the second respondent and to quash the order passed therein for the recovery of the tax.The facts relevant for the disposal of this petition are briefly these : The petitioner is a resident of Kurnool and was doing business in ground-nuts. He submitted a return for the year 1946-47, showing an assessable income if Rs. 4,938. During the course of assessment in the year 1947-48, it was found that he had deliberately concealed a large portion of his income by suppression of entries with respect to stocks and by claiming fictitious losses and other manipulation in the accounts. Taking all the circumstances into consideration, the Income- tax Officer estimated his income at Rs. 60,550. A notice under section 28(3) of the Act was issued to the assessee to show cause why a penalty should not be imposed on him. By an explanation dated March 15, 1948, the petitioner refuted the allegations mentioned in the notice and denied that he had deliberately suppressed his income or furnished inaccurate or false particulars. By an order dated September 8, 1953, the Income-tax Officer imposed penalty of Rs. 10,000 on the petitioner under section 28(1)(c) of the Act. Aggrieved by that order, the petitioner filed an appeal to the Income-tax Appellate Assistant Commissioner. By an order dated September 13, 1956, the appeal was allowed by Appellate Assistant Commissioner to ground that the petitioner was not given opportunity of being heard. The order of penalty was therefore set aside. The Department filed an appeal against the order of the Appellate Assistant Commissioner to the Income-tax Appellate Tribunal. In the meanwhile, for the assessment year 1952-53, the Income-tax Officer by an order dated March 23, 1957, determined the tax payable by the petitioner as Rs. 38,152-7-0. The petitioner field an appeal before the Income-tax Appellate Assistant Commissioner, who, by his order dated October 25, 1957, reduced the amount to Rs. 20,544-10-0.

(2.) BY reason of the order of the Appellate Assistant Commissioner dated September 13, 1956, canceling the penalty of Rs. 10,000 imposed on the petitioner, the petitioner became entitled to the refund of the said amount. A sum of Rs. 2,596-13-0 was adjusted against the tax due from the assessee for the year 1950-51. A balance of Rs. 7,403-3-0 was still due to the assessee by way of refund. Further, for the assessment years 1948-49, 1949-50, and 1950-51, the assessee became entitled to certain refunds. Taking into account all these figures, it was found that the assessee had still to pay as income-tax a sum of Rs. 9,318-15-0, for the year 1952-53. So, a certificate under section 46(2) of the Act was issued on February 3, 1958, for that sum.

(3.) WITH respect to the demand for Rs. 10,000, I should think, different consideration arise. It is not in dispute that the demand notice was duly issued on September 8, 1953. The petitioner applied for the payment of penalty in installments and the last of such payments was made on March 28, 1955. By an order dated September 13, 1956, the Appellate Assistant Commissioner canceled the penalty and the Appellate Tribunal set aside the appellate order.