VINOD KHURANA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IS the action of the respondents in holding that the petitioner is liable to pay interest, in respect of the asst. year 1994 -95 under S. 234B of the IT Act, 1991 illegal ? This is the short question that arises for consideration in this case. A few facts as relevant for the decision of the case may be briefly noticed.

(2.) THE petitioner filed a return of income for the asst. year 1994 -95. He declared an income of Rs. 98,515. It appears that during the course of assessment proceedings, the AO found that an amount of Rs. 5 lacs had been credited to the petitioner's account in his bank pass -book. He was questioned. The petitioner claimed that he had received a gift. However, he stated that "to avoid prolonged litigation with the IT Department and to win peace" he would surrender this amount as his income for the asst. year 1994 -95 subject to the condition that no penal action or prosecution was initiated against him. On 20th April, 1998, the petitioner filed a revised statement of taxable income and paid the additional amount of tax. He appended the following note to the revised statement of taxable income :

(3.) A reply has been filed on behalf of the respondents by Mr. Rajiv Aggarwal, Dy. CIT, Amritsar. It has been averred by way of a preliminary objection that the petitioner has an effective alternative remedy of a revision petition before the CIT, Amritsar under S. 264 of the Act. On merits, it has been pleaded that the petitioner had filed the revised return after he was questioned by the Asstt. Director about the alleged gift of Rs. 5 lacs. As such, "the said return cannot be termed as revised return within the meaning of S. 139(5) of the IT Act, 1961, firstly on the ground of the same being belated and, secondly, on the ground that the same was not filed as a result of discovery of any omission or any wrong statement therein. It was filed as the petitioner had failed to explain the gift. It was in pursuance to this detection that the petitioner had declared an income of Rs.