SANT PARKASH Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) IN this petition under Section 482 of the Criminal Procedure Code, and under article 227 of the Constitution of India, the petitioners have sought the quashing of complaint dated March 27, 1986, filed against them under Sections 276 (1), 277 and 278 of the Income-tax Act, 1961 (hereinafter called "the Act"), and under Sections 193 and 196 of the Indian Penal Code, and subsequent proceedings initiated in pursuance of the complaint which is pending in the court of the Chief Judicial Magistrate, Ludhiana, inter alia, alleging that petitioner No. 3 is a private limited company duly registered under the Companies Act, 1956, and petitioners Nos. 1 and 2 are its directors. Petitioner No. 4 is a person through whom the alleged amount of Rs. 16. 5 lakhs was received by petitioner No. 3.

(2.) INCOME-TAX return was filed on behalf of petitioner No. 3 for the assessment year 1982-83 on December 14, 1981, before respondent No. 2 (hereinafter referred to as "assessing authority") which was duly verified by petitioner No 1. The balance-sheet of the petitioner-company was also placed before the assessing authority and the said balance-sheet showed that the assessee received Rs. 16,50,000 as preference share application money and out of that amount, preference shares worth Rs. 13,50,000 were allotted and Rs. 3,00,000 was shown as balance in share application money account.

(3.) THE assessing authority started investigation into the matter of receiving Rs. 16,50,000 as share money and arrived at the conclusion that the said money was the undisclosed income of petitioner No. 3 and the assessing authority ordered that the same amount be added to the income of the assessee. In this regard, the explanation given on behalf of petitioner No. 3 that the sum of Rs. 16,50,000 was received through Shri Vimal Nanda and Kapil Dev was not believed by the assessing authority. Therefore, the assessing authority passed the assessment order on March 29, 1985, holding that the said amount of Rs. 16,50,000 was the undisclosed income of the assessee under the provisions of Section 68 of the Act.