SIRAJ SIDDIQUE Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS Writ Petition has been filed challenging the order dated 31/3/2004 passed by the Commissioner of Income Tax cancelling the certificate issued to the petitioner under Section 68(2) of the Voluntary Disclosure of Income Scheme 1997.

(2.) IN brief, the petitioner is an individual assessee of income tax. The dispute relates to the assessment year 1997-98. The petitioner earns income as partner of the Firm M/s. Milan Traders as also from the separate business of purchase and sale of Pan Masala in his individual capacity by making certain purchase from one M/s. Shivraj Tobacco Company of Kanpur. The petitioner had submitted the return of income for this period but had failed to disclose the income from the said individual business in the original return. The Voluntary Disclosure of INcome Scheme 1997 (for short "VDIS 1997") was introduced by the Finance Act of 1997 with effect from 1/7/1997 which remained in operation till 31/3/1998. The petitioner under the said Scheme had disclosed the income of Rupees fifty two lakhs earned from Kirana and Pan Masala business and had paid the tax accordingly. The certificate dated 3rd March, 1998 Annexure P.3 was issued to the petitioner under Section 68(2) of the Voluntary Disclosure of INcome Scheme 1997. After a lapse of time the summons under Section 131/131(A) of the INcome Tax Act were issued to the petitioner requiring him to produce books of account and other documents for the financial year 1996-97. The petitioner had submitted the reply Annexure P.5 and his statement was recorded on 1/8/2002. Thereafter the notice of assessment under Section 148 dated 27/3/2003 for the assessment year 1997-98 were issued by the income tax officer. Petitioner had filed return of income under protest disclosing the same income as per his original return and objecting to the proceedings, thereafter notice under Section 142 dated 1/8/2003 was issued by the INcome Tax Officer which was duly replied by the petitioner. The petitioner was communicated with the reasons recorded under Section 148 of the Act vide covering letter dated 15/9/2003 disclosing that the assessment was reopened on the alleged ground of escapement of income relating to transaction of purchases made by the petitioner from M/s. Shivraj Tobacco Company, Kanpur. The petitioner had filed objection to the same, pointing out that the said income was already disclosed by the petitioner in Voluntary Disclosure of INcome Scheme 1997. The assessing authority rejected the petitioner's objection and thereafter the notice dated 25/3/2004 was issued by the Commissioner of INcome Tax for cancellation of the certificate issued under the VDIS. The petitioner vide Annexure P.3 dated 26th March, 2004 sought time and had then submitted the reply dated 29th March, 2004 before the Commissioner and the Commissioner by the impugned order dated 31st March, 2004 has cancelled the certificate dated 3rd of March, 1998 issued to the petitioner under the VDIS 1997 and on the same day the assessing authority passed the order of reassessment. Aggrieved with the same, the petitioner has approached this Court questioning the cancellation of the certificate issued under the VDIS 1997.

(3.) BY the Finance Act of 1997, the Voluntary Disclosure of Income Scheme 1997(for short "VDIS 1997") was introduced. The certificate dated 3rd March,1998 was issued to the petitioner under Section 68(2) of the Voluntary Disclosure of Income Scheme 1997 relating to the assessment years 1992-93 to 1997-98 accepting the declared income of Rupees fifty two lakhs from Kirana and Pan Masala business and commission income from Kirana, Pan Masala etc. and accordingly the tax was paid on that amount.