AMINCHAND PAYARILAL Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This is an application under, Article 226 of the Constitution for the issue of appropriate writs for cancelling and/or quashing certain alleged decisions said to be contained in two letters dated the 27th/28th November, 1967, and the 20th November, 1967, by the respondent-Income-tax Officer, and prohibiting the said respondent from proceeding to make any assessment on the petitioner for the years 1959-60 to 1964-65, and this rule was obtained on the 4th January, 1968.

(2.) The facts are shortly these : The petitioner is the well-known partnership firm of Aminchand Payarilal whose partners are Shree Satya Pal, Shree Jit Pal, Shree Swaraj Pal and Shree Surrendra Pal. The petitioner filed a disclosure petition before the Central Board of Direct Taxes on the 19th September, 1958, and in the course of the said disclosure proceedings the petitioner agreed that the income of the firm and its partners for the assessment years 1951-52 to 1958-59 may be taken at Rs. 1 crore which was to be paid in certain instalments. This was accepted by the Central Board of Revenue. For the assessment years 1959-60 and 1960-61 the petitioner's assessments were completed by the respondent No. 1, who included in the total income very large sums as undisclosed income in respect of certain hundi loans which were held to be bogus. On appeal, the Appellate Assistant Commissioner set aside the aforesaid two assessment orders and directed the Income-tax Officer to make fresh assessments according to law.

(3.) By Section 68 of the Finance Act, 1965, a scheme for voluntary disclosure of income was introduced which provided that where any person made a declaration in respect of any amounts representing income which he had failed to disclose in his return filed for any assessment year before the 1st day of March, 1965, and which had escaped assessment, then notwithstanding anything contained in the Income-tax Act he would be charged tax at certain rates specified in Sub-section (3) of that section in respect of the amount so declared. It was further provided that the declaration should be made to the Commissioner and contain certain particulars as mentioned therein. One of the conditions for the submission of a voluntary disclosure was that the person making the disclosure must pay the amount of income-tax as computed at the rate prescribed in the said section. The material provisions are in Sub-sections (6) and (7) of that section which are as follows: